Document:

EXHIBIT 10.1

                     Interconnection Agreement

                              BETWEEN

                INDIANAPOLIS POWER & LIGHT COMPANY

                                AND

                INDIANA & MICHIGAN ELECTRIC COMPANY

                      Dated December 30, 1960

                             CONTENTS

Article                                                      Page

Preamble...................................................    1
 1.  Facilities to be Provided.............................    1
 2.  Provisions for, and Continuity of Interconnected......    3
       Operation
 3.  Services to be Rendered...............................    3
 4.  Service Conditions....................................    4
 5.  Delivery Points, Metering Points and Metering.........    5
 6.  Records and Statements................................    6
 7.  Billings and Payments.................................    6
 8.  Operating Committee...................................    6
 9.  Continuity of Service.................................    7
10.  Duration of Agreement.................................    7
11.  Arbitration...........................................    7
12.  Regulatory Authorities................................    8
13.  Waivers...............................................    8
14.  Assignment............................................    8

Service
Schedule

A    Firm Power to Indianapolis Company....................    9
B    Emergency Service.....................................   13
C    Coordination of Scheduled Maintenance of Generating...   15
     Facilities
D    Energy Transfer.......................................   17
E    Interchange Power.....................................   19
F    Short Term Power......................................   21

     0.01  THIS AGREEMENT, dated this 30th day of December, 1960, between
INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an Indiana
corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana Company), also
an Indiana corporation,

                       W I T N E S S E T H,

                             T H A T:

     0.02  WHEREAS, Indianapolis Company owns electric facilities and is
engaged in the generation, transmission, distribution, and sale of electric
power and energy in Indiana; and

     0.03  WHEREAS, Indiana Company owns electric facilities and is engaged
in the generation, transmission, distribution, and sale of electric power
and energy in Indiana and Michigan; and

     0.04  WHEREAS, Indianapolis Company and Indiana Company desire that
certain 345,000-volt transmission line facilities be provided and built so
as to establish a high capacity 345,000-volt interconnection between the
Indianapolis Company system and the Indiana Company system; and

     0.05  WHEREAS, Indianapolis Company and Indiana Company desire to
avail themselves of the mutual benefits and advantages to be realized by
interconnected systems operation through such 345,000-volt interconnection;
and

     0.06  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;

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

                             ARTICLE 1

                     FACILITIES TO BE PROVIDED

Indiana Company

     1.01  Indiana Company shall provide, own, and install, or cause to be
installed, at its own expense, the following described facilities; viz.:

          1.011  A 345,000-volt single circuit steel tower transmission
     line (hereby designated and herein called Tanners Creek-Hanna-De Soto
     Line), approximately 138 miles in length, constructed with two 954,000
     cm ACSR conductors per phase or with conductors of at least equivalent
     conductivity and suitable ground wires, to extend in a generally
     northerly direction from Indiana Company's Tanners Creek Station via
     Indianapolis Company's proposed Hanna Substation, to be located in or
     near Indianapolis, to Indiana Company's proposed DeSoto Substation,
     to be located near Muncie.

          1.012  On the existing 345,000-volt double circuit steel tower
     transmission line that extends from Tanners Creek Station to Indiana
     Company's Sorenson Substation, a second 345,000-volt circuit to extend
     from the proposed De Soto Substation to Sorenson Substation,
     approximately 48 miles in length, with main conductors of not less
     than 1.75 inches diameter 1,414,000 cm ACSR expanded conductor or of
     equivalent conductivity and diameter.

          1.013  At Tanners Creek Station, the necessary terminal
     equipment, including facilities suitable for the three-terminal
     control of the Tanners Creek-Hanna-De Soto Line described in
     subsection 1.011 above and essential to the protection of line and
     station equipment; such terminal equipment shall include one
     345,000-volt ultra-high speed automatic reclosing circuit breaker,
     appurtenant disconnecting and associated equipment, carrier current
     relays and associated carrier current equipment and every item
     required and suitable for the three-terminal control of said line and
     for the coordination of such control with terminal equipment to be
     provided by Indianapolis Company pursuant to subsection 1.021 below.

          1.014  At Tanners Creek Station 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.

Indianapolis Company

     1.02  Indianapolis Company shall provide, own, and install, or cause
to be installed, at its own expense, the following described facilities;
viz.:

          1.021  At Hanna Substation, the necessary terminal equipment,
     including facilities suitable for the three-terminal control of the
     Tanners Creek-Hanna-De Soto Line and essential to the protection of
     line and station equipment; such terminal equipment shall include one
     345,000/138,000-volt, three-phase auto-transformer having a nominal
     rating of not less than 200,000 kilovolt-amperes, one 138,000-volt
     ultra-high speed automatic reclosing circuit breaker, appurtenant
     disconnecting and associated equipment, carrier current relays and
     associated carrier current equipment, and every item required and
     suitable for the three-terminal control of said line and for the
     coordination of such control with terminal equipment to be provided by
     Indiana Company pursuant to subsection 1.013 above.

          1.022  At Hanna Substation, such suitable 138,000-volt metering
     equipment as described in Section 5.03 below.

          1.023  At Hanna Substation 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.

Interconnection Point

     1.03  The Interconnection Point shall be that point at Hanna
Substation where the terminal facilities provided therefor by Indianapolis
Company shall be connected to the Tanners Creek-Hanna-DeSoto Line.

Facilities Obligations Common To The Parties

     1.04  Subject to accidents, strikes, litigations, 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 May
31, 1963, and should the installation of said facilities be delayed beyond
said date due to the aforesaid causes it shall nevertheless be completed as
soon thereafter as practicable.

     1.05  The parties shall cooperate with one another so as to assure the
maximum practicable coordination of design of the facilities to be installed
by each of them with new and existing facilities of the other.

Maintenance of Equipment

     1.06  The parties shall each keep, or shall cause to be kept, the
lines, together with all associated equipment and appurtenances, described
in Article 1 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.

                             ARTICLE 2

    PROVISIONS FOR, AND CONTINUITY OF INTERCONNECTED OPERATION

     2.01  When the installation of the facilities as provided for under
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 2.01, 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 so as 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.

                             ARTICLE 3

                      SERVICES TO BE RENDERED

     3.01  It is the purpose in general of the parties to seek and realize
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 by them by carrying out under
stated terms and conditions various interconnection services and
transactions that may include among others:

          the sale and purchase of firm power and associated energy,

          the furnishing of mutual emergency and standby assistance,

          the interchange, sale, and purchase of energy to effect
     operating economies,

          the coordination of maintenance schedules of generating and
     transmission facilities,

          the transfer of electric energy through the transmission system
     of one party for the benefit of the other, and

          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 furtherance of such purpose the parties shall appoint an Operating
Committee as provided under Article 8.

     3.02  Inasmuch as the specific services to be rendered in furtherance
of such purpose will vary from time to time during the duration of this
agreement, and the terms and conditions applicable to such services may
require modification from time to time, it is intended that such specific
services and the terms and conditions applicable thereto will be set forth
in service schedules from time to time arranged between the parties.  Such
service schedules upon agreement of the parties, initially by Section 3.03
below or subsequently by separate execution, shall become parts of this
agreement during the periods fixed by their respective duration.

     3.03  The following service schedules are agreed to initially and
hereby made a part of this agreement:

          Service Schedule A - Firm Power to Indianapolis Company
          Service Schedule B - Emergency Service
          Service Schedule C - Coordination of Scheduled Maintenance of
                                 Generating Facilities
          Service Schedule D - Energy Transfer
          Service Schedule E - Interchange Power
          Service Schedule F - Short Term Power

                             ARTICLE 4

                        SERVICE CONDITIONS

Control of System Disturbance

     4.01  The parties shall maintain and operate their respective systems
so as to minimize, in accordance with sound operating practice, 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

     4.02  It is the intent that neither party shall be obligated to
deliver kilovars for the benefit of the other party; also that neither party
shall be obligated to receive kilovars when to do so may introduce
objectionable operating conditions on its system.  The Operating Committee
shall be responsible for the establishment 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

     4.03  The parties shall exercise due diligence and foresight in
carrying out all matters related to the providing and operating of their
respective electric power resources so as to minimize to the extent
practicable deviations between actual and scheduled deliveries of electric
power and energy between their systems.  The parties shall provide and
install on their respective systems such communication and telemetering
facilities as are essential to so minimizing 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.  Electric energy delivered hereunder in such
event shall be settled for either by the return of equivalent energy or by
payment of the out-of-pocket cost--such cost being as of the delivery point
or points, as provided for in Section 5.01 of this agreement, taking into
account electrical losses incurred from the source or sources of such energy
to said delivery point or points--to the supplying party of generating or
acquiring such energy plus ten per cent of such cost.  If equivalent energy
is returned, it shall be returned at times when the load conditions of the
party receiving it are equivalent to the load conditions of such party at
the time the energy for which it is returned was delivered or, if such party
elects to have equivalent energy returned under different conditions, it
shall be returned in such amounts, to be agreed upon by the Operating
Committee, as will compensate for the difference in conditions.

                             ARTICLE 5

          DELIVERY POINTS, METERING POINTS, AND METERING

Delivery Points

     5.01  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 1.03 above,
at a nominal voltage of 345,000 volts and at such other points and voltages
as may be agreed upon by the parties.

Metering Points

     5.02  Electric power and energy supplied and delivered under this
agreement shall be measured by suitable metering equipment provided, owned,
and maintained by Indianapolis Company at the metering point at hereinbelow
set forth; and at such other points, voltages, and ownership as may be
agreed upon by the parties; viz.:

          5.021  In respect of the Interconnection Point by 138,000-volt
     metering equipment installed at Hanna Substation.

Metering

     5.03  Suitable metering equipment at the metering points as provided
in Section 5.02 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:  (1)  a continuous
automatic graphic record of both kilowatts and kilovars, (2) an automatic
record of the kilowatt-hours for each clock hour, and (3) a continuous
integrating record of the kilowatt-hours.

     5.04  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, unless otherwise provided for in this
agreement, by the owner at the metering points as provided under Section
5.02 above.  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 as hereinabove
provided, the other party shall have the right to install check metering
equipment at the aforesaid metering points.  Metering equipment so installed
by one party on the premises of 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
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.

     5.05  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, a special test may be made
at the expense of the party requesting such special test. Representatives
of both parties shall be afforded 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.

     5.06  If at any test of metering equipment an inaccuracy shall be
disclosed exceeding two percent, the account between the parties for service
theretofore delivered shall be adjusted to correct for the inaccuracy
disclosed over the shorter of the following two periods: (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 as provided for under Section 5.03 above at any time fail
to register, the electric power and energy delivered shall be determined
from the check meters, if installed, or otherwise shall be determined from
the best available data.

                             ARTICLE 6

                      RECORDS AND STATEMENTS

Records

     6.01  In addition to records of the metering provided for in Article 5
above, the parties shall keep in duplicate such other records as may be
needed to afford a clear history of the various deliveries of electric
energy made by one party to the other and of the clock-hour integrated
demands in kilowatt-hours delivered by one party to the other.  In
maintaining such records, the parties shall effect such segregations and
allocations of demands and electric energy delivered into classes
representing the various services and conditions as may be needed in
connection with settlements under 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 except as the
parties may agree upon a different time interval for such delivery.

Statements

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

                             ARTICLE 7

                       BILLINGS AND PAYMENTS

     7.01  All bills for amounts owed by one party to the other shall be
due and payable on the fifteenth day of the month next following the monthly
or other period to which such bills are applicable, or on the tenth day
following receipt of bill, whichever date be later. Interest on unpaid
amounts shall accrue at the rate of six per cent per annum from the date due
until the date upon which payment is made.  Unless otherwise agreed upon a
calendar month shall be the standard monthly period for the purposes of
settlements under this agreement.

                             ARTICLE 8

                        OPERATING COMMITTEE

     8.01  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 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 alternate whenever such representative is unable to act).
Such representative and alternate or alternates shall each be persons
familiar with the generating, transmission, and substation facilities of the
system of the party by which he has been so designated, and each shall be
fully authorized (1) to cooperate with the other representative (or
alternates) and (2) from time to time as the need arises, subject to the
declared intentions of the parties herein set forth and to the terms hereof
and the terms of any other agreements then in effect between the parties, to
determine and agree upon the following:

          8.011  All matter pertaining to the coordination of maintenance
     of the generating and transmission facilities of the parties.

          8.012  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.

          8.013  Such other matters not specifically provided for herein
     upon which cooperation, coordination, and agreement as to quantity,
     time, method, terms and conditions are necessary in order that the
     operation of the systems of the parties may be coordinated to the end
     that the potential savings will be realized to the fullest practicable
     extent that is agreed upon by the parties.

     8.02  For the purpose of inspection and reading of meters, checking of
records, and all other pertinent matters, said representatives and their
alternates shall have the right of entry to all property of the parties used
in connection with the performance of this agreement.

                             ARTICLE 9

                       CONTINUITY OF SERVICE

     9.01  Each party shall exercise due diligence and reasonable care and
foresight to maintain continuity of service in the delivery and receipt of
energy as provided under this agreement, but neither party shall be
considered to be 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 which causes such party could not have avoided by exercise of
due diligence and reasonable care.  Any party unable to fulfill any
obligation by reason of uncontrollable forces shall exercise due diligence
to remove such disability with reasonable dispatch.

                            ARTICLE 10

                       DURATION OF AGREEMENT

     10.01  This agreement shall continue from the date hereof to the
expiration of a period of thirty consecutive years commencing upon the
Interconnection Date, as defined in this Section 10.01, and thereafter for
successive periods of one year unless and until terminated as provided for
in Section 10.02 below.  The Interconnection Date for purposes of this
agreement 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
as provided for in Article 2 above.  As soon as practicable following the
establishment of such date in conformance with the foregoing, the parties,
as a matter of record, shall exchange letters setting forth their acceptance
thereof as said Interconnection Date.

     10.02  Either party upon at least thirty months' prior written notice
to the other may terminate this agreement at the expiration of said period
of thirty consecutive years or at the expiration of any successive period of
one year.

                            ARTICLE 11

                            ARBITRATION

     11.01  In the event of disagreement between the parties with respect
to (1) any matter herein specifically made subject to arbitration, (2) any
question of operating practice involved in the deliveries of power and
energy herein provided for, (3) any question of fact involved in the
application of the provisions of this agreement, or (4) the interpretation
of any provision of this agreement, the matter involved in the disagreement
shall, upon demand of either party, 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.

     11.02  The party calling for arbitration shall serve notice in writing
upon the other party, 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, call 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 call, appoint a second arbitrator, and the two so appointed
shall choose and appoint a third.  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 agreed 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 person who at the time shall be the senior Judge, in
point of service, of the United States District Court having jurisdiction at
Indianapolis, Indiana, for appointment of the second or third arbitrator, as
the case may be.

     11.03  The sole arbitrator, or the board of arbitrators, shall afford
adequate opportunity to the parties to present information with respect to
the question or questions 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 be a board of arbitrators, and all other costs incurred
in connection with the arbitration shall be paid in equal parts by the
parties hereto, unless the award shall specify a different division of the
costs.

                            ARTICLE 12

                      REGULATORY AUTHORITIES

     12.01  This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.

                            ARTICLE 13

                              WAIVERS

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

                            ARTICLE 14

                            ASSIGNMENT

     14.01  This agreement shall inure to the benefit of and be binding
upon the successors and assigns of the respective parties.

     14.02  In Witness Whereof, the parties hereto have caused this
agreement to be executed by their duly authorized officers.

                                    INDIANAPOLIS POWER & LIGHT COMPANY

                                    By:  /s/ O.T. Fitzwater
                                        O.T. Fitzwater, President

ATTEST:

/s/ Ralph W. Husted
Ralph W. Husted, Secretary

                              INDIANA & MICHIGAN ELECTRIC COMPANY

                              By:  /s/ Philip Sporn
                                 Philip Sporn, President

ATTEST:

/s/ M.P. McGlone
M.P. McGlone, Asst. Secretary

                        SERVICE SCHEDULE A

                Firm Power to Indianapolis Company

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and

                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company) shall
become effective June 1, 1963 and shall continue in effect until May 31,
1973 and thereafter for successive periods of one year unless and until
terminated as provided for in this subsection 1.1. Either party upon at
least thirty months' prior written notice may terminate this Service
Schedule on May 31, 1973 or at the expiration of any successive period of
one year thereafter.

SECTION 2 - FIRM POWER

     2.1  Indiana Company shall sell and deliver and Indianapolis Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Firm Power ) and associated electric energy (Firm
Energy).  Throughout the duration of this Service Schedule, Indiana Company
shall stand ready at all times, subject to the provisions of this agreement,
to deliver to Indianapolis Company Firm Power and Firm Energy in any amount
desired by Indianapolis Company up to a maximum rate of delivery equal to
the Firm Contract Demand as defined in subsection 3.1 of this Service
Schedule.

SECTION 3 - DEFINITION OF BILLING FACTORS

     Firm Power Demand

     3.1  The following terms, wherever used in this Service Schedule,
shall have the following meanings:

          3.11  "Month" means Calendar Month.

          3.12  "Contract Year" means the period of twelve consecutive
     months beginning on June 1, 1963, or any succeeding anniversary date
     thereof and terminating the last day of any such period.

          3.13  "Firm Contract Demand" for any month means the figure in
     effect for such month as set forth below in this subsection 3.13:

                           Firm Contract Demand
                           Contract Year                 Kilowatts

     June 1, 1963 to May 31, 1964...................     50,000
     June 1, 1964 to May 31, 1965...................     100,000
     June 1, 1965 to May 31, 1966...................     150,000

          For each contract year following May 31, 1966, the firm contract
     demand will be the same as that of the preceding contract year,
     subject, however, to the following conditions:

          Indianapolis Company may, by giving Indiana Company notice in
     writing not less than thirty months prior to the fourth contract year
     or any succeeding contract year thereafter, establish the amount of
     the Firm Contract Demand for such year provided, however, that such
     Firm Contract Demand will in no event be less than 100,000 kilowatts
     nor more than 150,000 kilowatts.

     Firm Energy

     3.2  The number of kilowatt-hours of Firm Energy to be delivered to
Indianapolis Company and the time of delivery thereof, subject to the rate
of delivery limit specified in subsection 2.1 of this Service Schedule,
shall be scheduled by Indianapolis Company, and the number of kilowatt-hours
of such Firm Energy so scheduled during each clock-hour shall be recorded as
provided for in Article 6 of this agreement.  The aggregate number of
kilowatt-hours of Firm Energy so recorded for any month shall be used for
the purpose of effecting billings and payments under this Service Schedule
for such month.  Each of the parties shall exercise due diligence and
reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Firm Energy shall be delivered
and taken in accordance with such delivery schedules.

SECTION 4 - COMPENSATION

     4.1  Indianapolis Company shall pay Indiana Company each month for
services provided for under this Service Schedule upon the bases of the
billing factors determined for such month and as hereinbelow provided:

     Minimum Charge

     For services provided for under this Service Schedule, Indianapolis
Company shall pay Indiana Company a Minimum Charge each calendar month of
$3.48 per kilowatt of Firm Contract Demand.  Such additional charges to be
paid any month by Indianapolis Company to Indiana Company as provided for in
Section 5 of this Service Schedule are to be paid in addition to any charge
for such month as provided for in this Section 4.  In the event the bill
rendered to Indianapolis Company for any calendar month is subject to
decrease by an amount as provided for in said Section 5, any charge,
including the minimum charge, for such month determined as provided for in
this Section 4 shall be decreased by such amount.

     Energy Charges

          The charge for the total kilowatt-hours taken up to a
               quantity equal to 450 times the Firm Contract Demand is
               included in the Minimum Charge specified above.

          For the remaining kilowatt-hours taken, the
               charge per kilowatt-hour shall be............. 1.90 mills

The charges provided for in this Section 4 shall be subject to adjustment in
accordance with the provisions of Section 5 of this Service Schedule.

     Firm Energy Account

     4.2  If, during any calendar month, the kilowatt-hours of Firm Energy
delivered by Indiana Company to Indianapolis Company under this Service
Schedule are less than the product of 450 hours and the Firm Contract
Demand, the number of kilowatt-hours of Firm Energy paid for by Indianapolis
Company for such month pursuant to subsection 4.1 above that were not
actually delivered to Indianapolis Company shall be set up in an account
(herein called Firm Energy Account) to the credit of Indianapolis Company.
During any subsequent month that there is a balance of kilowatt-hours
remaining to the credit of Indianapolis Company in such Firm Energy Account
and the kilowatt-hours of Firm Energy delivered to Indianapolis Company for
such month are in excess of the product of 450 hours and the Firm Contract
Demand for such month, a quantity of kilowatt-hours equal to (1) such excess
kilowatt-hours or (2) the balance of kilowatt-hours remaining to the credit
of Indianapolis Company in the Firm Energy Account, whichever amount is the
smaller, shall be billed to Indianapolis Company at no charge therefor,
excepting such charges as are applicable thereto in accordance with Section
5 of this Service Schedule, and the Firm Energy Account shall be charged
with such number of kilowatt-hours so billed to Indianapolis Company.

SECTION 5 - ADDITIONAL CHARGES AND CREDITS

     5.1  The following terms, wherever used in this
Service Schedule,
shall have the following meanings:

     5.11  Principal Stations - The steam-electric generating stations of
               Indiana Company known as Breed, Tanners Creek, and Twin
               Branch and any new principal steam-electric generating
               stations (exclusive of nuclear power stations) that may be
               placed in service by Indiana Company.

     5.12  Account No. 501.  Fuel - The production expense account of the
               Uniform System of Accounts prescribed for Public Utilities
               and Licensees by the Federal Power Commission as
               prevailing during January, 1961.

     5.13  Weighted average Fuel Cost - The total of all the components of
               cost at all the Principal Stations chargeable to Account
               No. 501 Fuel during a specified period divided by the
               total millions of Btu in fuel charged to said account at
               all the Principal Stations during such period, expressed
               in cents per million Btu.

     5.14  Weighted average Fuel Consumption - The total Btu in fuel
               charged to Account No. 501 Fuel, at the Principal Stations
               during a specified period divided by the total kilowatt-hour
               net generation at all the Principal Stations during such
               period, expressed in Btu per kilowatthour.

     5.15  Accounts other than Fuel - All of the operating production
               expense accounts for Electric Generation-Steam Power of said
               Uniform System of Accounts other than Account No. 501 Fuel
               as prevailing during January 1961.

     5.16  Capability of Breed Station - The aggregate kilowatt-hours of
               net generation during a clock-hour period that the Breed
               Station is capable of generating at the time of the annual
               peak load of the Indiana Company system with all equipment
               operating at such station.

     5.17  Weighted average cost other than Fuel at Breed Station - The
               total of all the components of cost chargeable to the accounts
               other than Fuel specified in subsection 5.15 above at the
               Breed Station during a specified period divided by the
               product of (1) the Capability of the Breed Station during
               such period and (2) the number of months during such
               period, expressed in cents per kilowatt-month.

     5.2  The charges provided for in Section 4 of this Service Schedule
are based upon a weighted average fuel cost of twenty and one-half cents
($0.205) per million Btu at the Principal Stations.  In the event such
weighted average fuel cost for any month is above twenty and one-half cents
($0.205) per million Btu by at least one mill, an additional charge during
the next succeeding month shall be made on the kilowatt-hours of Firm Energy
actually delivered during such succeeding month at a rate of 0.0105 mills
per kilowatt-hour for each full mill increase in such weighted average fuel
cost above twenty and one-half cents ($0.205) per million Btu. In the event
such weighted average fuel cost for any month is less than twenty and
one-half cents ($0.205) per million Btu by at least one mill, the bill
rendered to Indianapolis Company for the next succeeding month shall be
decreased by an amount equal to the kilowatt-hours of Firm Energy actually
delivered during such succeeding month at a rate of 0.0105 mills per
kilowatt-hour for each full mill decrease in such weighted average fuel cost
below twenty and one-half cents ($0.205) per million Btu. The said
adjustment factor of 0.0105 mills shall be subject to adjustment as provided
for in subsection 5.3 of this Service Schedule.

     5.3  The said adjustment factor of 0.0105 mills is based upon a
weighted average fuel consumption of 10,500 Btu per kilowatthour of net
generation.  In the event that improvements in the thermal efficiency of the
presently existing Principal Stations or the addition of any new Principal
Station bring about a reduction in the weighted average fuel consumption for
a period of twelve (12) consecutive months of at least 200 Btu below 10,500
Btu per kilowatthour, the adjustment factor of 0.0105 mills for the next
succeeding month shall be decreased 0.00019 mills for each full 200 Btu that
the weighted average fuel consumption so becomes lower than 10,500 Btu per
kilowatthour.

     5.4  If the weighted average cost other than fuel at Breed Station for
a period of twelve consecutive elapsed months is above 16.7 cents per
kilowatt-month by at least 0.5 cent, for each full 0.5 cent that such cost
is above 16.7 cents, the next succeeding month Indianapolis Company shall
pay 0.625 cent per kilowatt of Firm Contract Demand.  If the weighted
average cost other than fuel at Breed Station for a period of twelve
consecutive elapsed months is below 16.7 cents per kilowatt-month by at
least 0.5 cent, for each full 0.5 cent that such cost is below 16.7 cents,
the bill rendered to Indianapolis Company for the next succeeding month
shall be decreased by 0.625 cent per kilowatt of Firm Contract Demand.

SECTION 6 - BILLINGS AND PAYMENTS

     6.1  Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7 of this agreement.

SECTION 7 - TAXES

     7.1  It is expressly agreed and made a provision of this Service
Schedule that if at any time during the term hereof there should be levied
and/or assessed against Indiana Company any direct tax by any taxing
authority on the Firm Power and/or Firm Energy manufactured, generated,
produced, converted, sold, purchased, transmitted, interchanged, exchanged,
exported or imported by Indiana Company, in addition to or different from
the forms of such direct taxes now being levied and/or assessed against
Indiana Company, or any increase in the rate of such existing or future
direct taxes, which Indiana Company could demonstrate to be unduly
burdensome to it in the performance of the obligations herein provided, then
in such event, the parties shall endeavor to make such an agreement in
regard to sharing the burden created by such tax as appears to be equitable
and proper under the circumstances.

SECTION 8 - DEFERRAL OF EFFECTIVE DATE

     8.1  Notwithstanding any of the foregoing provisions of this Service
Schedule, in the event Indiana Company as of June 1, 1963, is unable to
provide 345,000-volt transmission line facilities suitable for connection to
Indianapolis Company's terminal facilities as Hanna Substation, as described
in Section 1.02 of Article 1 of this agreement, and sufficiently completed
to enable Indiana Company to supply over such facilities Firm Power service
as provided for in this Service Schedule, this Service Schedule shall not
become effective until June 1 next following the day, or on such day if it
should be June 1, that Indiana Company is so able to provide such
345,000-volt transmission line facilities.  In the event that this Service
Schedule becomes effective after June 1, 1963, as provided for in this
subsection 8.1, it shall continue in effect from the date that it so becomes
effective to the expiration of a period of ten consecutive years and
thereafter for successive periods of one year unless and until terminated as
provided for in this subsection 8.1.  Either party upon at least thirty
months' prior written notice to the other may terminate this Service
Schedule at the expiration of said period of ten consecutive years or at the
expiration of any successive period of one year.

                        SERVICE SCHEDULE B

                         EMERGENCY SERVICE

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and

                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.

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 deliver to such party
electric energy in amounts up to and including 50,000 kilowatts which 50,000
kilowatts is hereby designated and herein called Emergency Capacity, and
shall also deliver any additional electric energy in excess of said amount
that it is requested to deliver; provided, however, that neither party shall
be obligated to deliver any part of such additional energy which, in its
sole judgment, it cannot deliver without interposing a hazard to or economic
burden upon its operations or without impairing or jeopardizing the other
load requirements of its system; and provided further, that neither party
shall be obligated to deliver electric energy in amounts up to and including
or in excess of said Emergency Capacity to the other for a period in excess
of forty-eight consecutive hours during any single emergency.

     2.2  The parties recognize that the delivery of electric energy up to
and including the Emergency Capacity 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 system of a party may be suffering
an emergency in or on its own system as described in said subsection 2.1, or
(b) the system of a party 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 reasonable 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 this 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 this
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  Electric energy delivered under Section 2 above shall be settled
for either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost--such cost
being as of the delivery point or points, as provided for in Section 5.01 of
Article 5 of this agreement, taking into account electric losses incurred
from the source or sources of such energy to said delivery point or
points--to the supplying party of generating or supplying such energy plus
ten per cent of such cost.  If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it are
equivalent to the load conditions of such party at the time the energy for
which it is returned was delivered or, if such party elects to have
equivalent energy returned under different conditions, it shall be returned
in such amounts, to be agreed upon by the Operating Committee, as will
compensate for the difference in conditions.

                        SERVICE SCHEDULE C

               COORDINATION OF SCHEDULED MAINTENANCE
                     OF GENERATING FACILITIES

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.

SECTION 2 - SERVICES TO BE RENDERED

     2.1  In furtherance of the benefits to be realized by the parties by
coordinating to the extent practicable the scheduled maintenance, repair,
and overhaul of generating facilities in their respective systems and in
connection with such scheduled maintenance, repair, and overhaul of
generating facilities the parties shall arrange for, deliver, and take
electric power and energy in amounts and under conditions as follows; viz.:

               2.11  For purposes of this Service Schedule the full
          twelve months' period commencing on the Interconnection Date
          shall be the first Maintenance Period and each succeeding full
          twelve months' period that this Service Schedule is in effect
          shall be a Maintenance Period.  During each Maintenance Period,
          at different intervals  determined as provided for under
          subsection 2.12 below, each party shall have the right to call
          for and take delivery of not more than the total of 10,000,000
          kilowatt-hours from the other under this Service Schedule.
          Delivery of such energy, subject to the provisions of this
          subsection 2.1, may be taken at such times and at such rates of
          take as the receiving party may elect up to a maximum rate of
          take of 25,000 kilowatts.

               2.12  The Operating Committee shall determine and agree
          upon the dates of the intervals referred to under subsection
          2.11 above during which Indianapolis Company shall deliver any
          such energy desired by or returnable to Indiana Company and,
          conversely, the dates of such intervals during which Indiana
          Company shall deliver any such energy desired by or returnable
          to Indianapolis Company.  Subject to the understanding
          hereinbelow cited, such intervals shall each consist of single
          periods of not less than seven consecutive calendar days, and
          the receiving party's right to call for and take not more than
          the aforesaid total of 10,000,000 kilowatt-hours during any
          Maintenance Period shall be restricted to not more than eight
          such intervals so agreed upon by the Operating Committee during
          such Maintenance Period.  It is understood that during any
          Maintenance Period each party shall have a total of sixty days
          during which it shall have the right to call for and take not
          more than said 10,000,000 kilowatt-hours from the other under
          this Service Schedule.

               2.13  On the day next preceding the first day of an
          interval as described under 2.12 above and on each day of such
          interval excepting the last day, at a time determined to be
          practicable by the Operating Committee, the receiving party
          shall furnish the other a load schedule for the next calendar
          day, or for such other twenty-four hour period or periods as may
          be agreed upon by the Operating Committee. Such load schedules
          shall show for each clock hour the quantity of energy that the
          receiving party expects to take from the other at the delivery
          point or points, as provided for in Section 5.01 of this
          agreement.

SECTION 3 - ANNUAL SETTLEMENT

     3.1  It is expected that during a full Maintenance Period one party
shall, to the extent practicable, take from the other party the same number
of kilowatt-hours, up to the aforesaid 10,000,000 kilowatt-hours specified
in Section 2 of this Service Schedule, that such other party has delivered
pursuant to said Section 2.  If, however, the total kilowatt-hours received
by one party during a full Maintenance Period, pursuant to said Section 2,
is greater than the total kilowatt-hours delivered by such party during such
period and pursuant to said Section 2, the parties shall (1), subject to
their mutual agreement, effect the arrangements provided for in subsection
3.11 below or (2), subject to their mutual agreement, effect a combination
of the arrangements provided for in subsection 3.11 below and a cash
settlement as provided for in subsection 3.12 below or (3) effect a cash
settlement as provided for in subsection 3.12 below.

          3.11  The Operating Committee shall arrange, if the parties
     mutually agree that it shall be so arranged, for the delivery of all
     or any part of the kilowatt-hour difference between the total
     kilowatt-hours received and delivered by one party during a full
     Maintenance Period, pursuant to Section 2 of this Service Schedule.
     Such delivery, to be made by the party receiving such kilowatt-hour
     difference to the other party, shall be made during the next following
     Maintenance Period at intervals thereof and in amounts and at rates of
     delivery to be determined and agreed upon by the Operating Committee,
     but such delivery shall be excluded from all accounting under this
     Service Schedule with respect to such following Maintenance Period.

          3.12  For the kilowatt-hour difference, or any part thereof if
     the parties mutually agree to effect a cash settlement for only such
     part, between the total kilowatt-hours received and delivered by one
     party during a full Maintenance Period, pursuant to Section 2 of this
     Service Schedule, the party receiving such kilowatt-hour difference
     shall pay the other party at a rate per kilowatt-hour determined by
     dividing (1), one hundred and ten per cent of the aggregate
     out-of-pocket cost--such cost being as of the delivery point or
     points, as provided for in Section 5.01 of Article 5 of this
     agreement, taking into account electrical losses incurred from the
     source or sources of such energy to said delivery point or
     points--experienced by the systems of both parties in generating or
     supplying the aggregate kilowatt-hours delivered during and applicable
     to such Maintenance Period, pursuant to Section 2 of this Service
     Schedule, by (2), the number of such aggregate kilowatt-hours.

SECTION 4 - MODIFICATION

     4.1  Each party, by written notice given to the other party not less
than ninety days prior to the end of the second or any subsequent
Maintenance Period, may call for a reconsideration of the terms and
conditions of this Service Schedule, provided that there shall be no such
reconsideration during the first Maintenance Period and no more than one
such reconsideration during the second Maintenance Period, and that no
subsequent reconsideration shall be made sooner than two years following any
previous reconsideration.  If such reconsideration is called for, there
shall be taken into account any changed conditions, any results from the
application of said terms and conditions not foreseen or reasonably
foreseeable as of the day first above written or as of the day of conclusion
of the next previous reconsideration, if any, and any other factors which
might cause said terms and conditions to result in any inequitable division
of the benefits of interconnected operation or in an inadequate realization
of such benefits.  Any modification in terms and conditions agreed to
between the parties following such reconsideration shall become effective at
the beginning of the Maintenance Period next following the aforesaid
ninety-day notice period.

                        SERVICE SCHEDULE D

                          ENERGY TRANSFER

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.

SECTION 2 - TRANSFER ARRANGEMENT

     2.1  In carrying out the interconnected operation of their respective
systems as provided for under this agreement, energy being received by a
portion of one party's system from another portion of its system or from the
system of another interconnected company, or energy being delivered by a
portion of one party's system to 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 of which the transmission systems of the parties are a part.  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
agreed as follows; viz.:

          2.11  Such energy transfer over their respective facilities
     shall be permitted when such transfer occurs; subject, however, to the
     understanding 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 transfer occurs to render proper
     service to its customers, and to render or accept service to or from
     companies with which it now has or at any time hereafter it may have
     contractual arrangements to furnish, take, or interchange power or
     energy, or both.

          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 transfer occurs is not
     affected adversely or jeopardized in meeting its own requirements as
     described under 2.11 above.  In the event the need for such additional
     transmission facilities become apparent to either of the parties
     during the duration 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 re-examine conditions
     relating to energy transfer.  In such re-examination, 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 transfer as described under
Section 2 of this Service Schedule, except for such amounts of electrical
losses as may be incurred because of such energy transfer, is 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 transfer
occurs.  Power and energy associated with energy transfer, including
electrical losses associated therewith, shall be accounted for each
clock-hour as provided for under Article 6 of this 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
transfer, 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 transfer is being made.
The parties have agreed 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 re-examination and
reconsideration of matters pertinent to the establishment of said basic
conditions, whenever such re-examination 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.  A
statement to be prepared by the parties at the end of each calendar month
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.

                        SERVICE SCHEDULE E

                         INTERCHANGE POWER

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.

SECTION 2 - SERVICES TO BE RENDERED

     Economy Energy

     2.1  It is recognized that from time to time each of the parties may
have electric energy (herein called Economy Energy) available from surplus
capacity either on its own system or from sources outside its own system, or
both, and that Economy Energy could be supplied to the other party at a cost
that would result in operating savings to such other party.  Such operating
savings would result from the displacement of electric energy that otherwise
would be supplied from capacity either on such other party's system or from
sources outside its own system, or both.  To promote the economy of electric
power supply and to achieve efficient utilization of production capacity,
either party, whenever it in its own judgment determines Economy Energy is
available, may, but shall not be obligated to, offer Economy Energy to the
other party.  Promptly upon receipt of any such offer said other party shall
notify the offering party of the extent to which it desires to use such
Economy Energy, and schedules providing the periods and extent of use shall
be agreed upon.

     Non-Displacement Energy

     2.2  It is further recognized that from time to time occasions will
arise when the effecting of transactions as provided under subsection 2.1
next above will be impracticable, but at the same time one of the parties
may have electric energy (herein called Non-Displacement Energy) which it is
willing to make available from surplus capacity either on its own system or
from sources outside its own system, or both, that can be utilized
advantageously for short intervals by the other party. It shall be the
responsibility of the party desiring the receipt of Non-Displacement Energy
to initiate the receipt and delivery of such energy.  The party desiring
such receipt of energy shall inform the other party of the extent to which
it desires to use Non-Displacement Energy, and, when ever in its own
judgment such other party determines that it has Non-Displacement Energy
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  Economy Energy supplied hereunder shall be considered as
displacing electric energy that otherwise would have been generated by the
receiving party at its own steam-electric generating stations or any
electric energy from third parties mutually agreed to be subject to
displacement hereunder.  Economy Energy shall be settled for at rates which
shall be predicated upon the principle that savings in operating costs to
the systems of the parties resulting from the use of Economy Energy shall be
divided between the parties as equally as is practicable. Prior to any
transaction involving the delivery and receipt of Economy Energy, authorized
representatives of the parties shall determine and agree upon the
compensation applicable to such transaction. Compensation so agreed upon
shall not be subject to later review or adjustment.

     Non-Displacement Energy

     3.2  Non-Displacement Energy delivered hereunder shall be settled for
either by the return of equivalent energy or, at the option of the party
that supplied such energy, by payment of the out-of-pocket cost--such cost
being as of the delivery point or points, as provided for in Section 5.01 of
Article 5 of this agreement, taking into account electrical losses incurred
from the source or sources of such energy to said delivery point or
points--to the supplying party of generating or supplying such energy plus
ten per cent of such cost.  If equivalent energy is returned, it shall be
returned at times when the load conditions of the party receiving it are
equivalent to the load conditions of such party at the time the energy for
which it is returned was delivered or, if such party elects to have
equivalent energy returned under different conditions, it shall be returned
in such amounts, to be agreed upon by the Operating Committee, as will
compensate for the difference in conditions.

                        SERVICE SCHEDULE F

                         SHORT TERM POWER

         Under Agreement, dated December 30, 1960, between

              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on the Interconnection Date as defined in Section 10.01 of
Article 10 of this agreement and shall continue in effect throughout the
duration of the agreement of which it is a part.

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 week, i.e., any specified period of seven
consecutive days, such electric power (herein called Short Term Power) as
the other party may at such time have and is willing to make available as
Short Term Power.  The party asked to supply Short Term Power shall be the
sole judge as to the amounts and periods that its has electric power
available that may be reserved by the other party as Short Term Power.

          2.11  To reserve Short Term Power, the party desiring such power
     shall specify in its notice to the other party the number of kilowatts
     and the period for which it desires to so reserve such power and the
     desired schedule of delivery of the power so reserved.  The party
     receiving such notice, in a prompt acknowledgment shall signify the
     extent of its ability and willingness to comply with the provisions of
     such notice.  Any notice or any acknowledgment of such notice that may
     be given orally initially, if requested by either party, 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.

          2.12  During the period that Short Term Power has been reserved
     as above provided, the party having agreed to supply such power shall
     deliver electric energy (herein called Short Term Energy) to the other
     party at the delivery point or points, as provided for in Section 5.01
     of Article 5 of this agreement, upon call and in amounts up to 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 Short Term Energy to be burdensome to the supplying party,
     said party has the right to request the other party to reduce its take
     of such energy to any amount specified and for any portion of such
     period.  The party so requested shall promptly comply with the request
     of the other party.

          2.13  The Short Term Power billing demand for any week shall be
     taken as equal to the number of kilowatts reserved for such week as
     Short Term Power.

SECTION 3 - COMPENSATION

     3.1  Payments for the supply of Short Term Power and Short Term Energy
shall be predicated upon the following rates:

          3.11  Demand Charge

          For the billing demand for each week at the rate of $0.30 per
     kilowatt for such week.  In the event the amount of Short Term Energy
     taken is reduced upon request of the supplying party, the demand
     charge for the week during which such reduction is made shall be
     reduced by $0.06 per kilowatt of reduction for each day during which
     any reduction is in effect.

          3.12  Energy Charge

          For the kilowatt-hours of Short Term Energy taken, at a rate per
     kilowatt-hour equal to the out-of-pocket cost--such cost being as of
     the delivery point or points, as provided for in Section 5.01 of
     Article 5 of this agreement, taking into account electrical losses
     incurred from the source or sources of such energy to said delivery
     point or points--to the supplying party of generating or supplying
     such energy plus ten per cent of such cost.

                        Modification No. 1

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                           _____________

                      Dated November 14, 1963

     THIS AGREEMENT, made and entered into as of the 14th day of November,
1963, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company) also an Indiana corporation,

                            WITNESSETH,

                               THAT,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
interconnection agreement, dated December 30, 1960, (herein called 1960
Agreement); and

     WHEREAS, the parties desire to modify the 1960 Agreement, as
hereinafter set forth;

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

     SECTION 1.  Section 3.03 of Article 3 of the 1960 Agreement is hereby
modified to read:

          "3.03  The following service schedules are agreed to and hereby
     made a part of this agreement:

          Service Schedule A - Firm Power to Indianapolis Company
          Service Schedule B - Emergency Service
          Service Schedule C - Coordination of Scheduled Maintenance of
                                 Generating Facilities
          Service Schedule D - Energy Transfer
          Service Schedule E - Interchange Power
          Service Schedule F - Short Term Power
          Service Schedule G - Interim Power to Indianapolis Company"

Service Schedule G is attached hereto as the Appendix.

     SECTION 2.  This agreement shall be effective as of the day and year
first above written and shall remain in effect until the termination of the
1960 Agreement.

     SECTION 3.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     SECTION 4.  This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.

     SECTION 5.  This agreement shall inure to the benefit of and be
binding upon the successors and assigns of the respective parties.

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

                         INDIANAPOLIS POWER & LIGHT COMPANY

                         By  /s/ Ottis T. Fitzwater
                         Ottis F. Fitzwater, President

Attest:

/s/ Ralph W. Husted
Ralph W. Husted, Secretary

                         INDIANA & MICHIGAN ELECTRIC COMPANY

                         By  /s/ Donald C. Cook
                         Donald C. Cook, President

Attest:

/s/ M.P. McGloone
M.P. McGloone, Assistant Secretary

                             APPENDIX

                        SERVICE SCHEDULE G

               INTERIM POWER TO INDIANAPOLIS COMPANY

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company), made
and entered into as of the 14th day of November, 1963, shall continue in
effect throughout the duration of the agreement of which it is a part.

SECTION 2 - INTERIM POWER

     2.1  Indiana Company shall sell and deliver and Indianapolis Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Interim Power) and associated electric energy
(Interim Energy).  Throughout the duration of this Service Schedule, Indiana
Company shall stand ready at any time, subject to the provisions of this
agreement, to deliver to Indianapolis Company Interim Power and Interim
Energy in any amount desired by Indianapolis Company up to a maximum rate of
delivery equal to the Interim Contract Demand, as defined in subsection 3.1
of this Service Schedule, in effect at such time.

SECTION 3 - DEFINITION OF BILLING FACTORS

     Interim Power Demand

     3.1  The following terms, wherever used in this Service Schedule,
shall have the following meanings:

          3.11  "Month" means calendar month.

          3.12  "Contract Period" means any period of consecutive months
     so designated and agreed upon by the parties for the purposes of this
     Service Schedule.  The initial period so designated and agreed upon
     shall begin June 1, 1966 and terminate October 31, 1966.

          3.13  "Interim Contract Demand" for any month means the kilowatt
     demand figure in effect for such month which has been so designated
     and agreed upon by the parties for the purposes of this Service
     Schedule.  The initial demand figure so designated and agreed upon
     shall be 80,000 kilowatts and shall be in effect from June 1, 1966
     until October 31, 1966.

     Interim Energy

     3.2  The number of kilowatt-hours of Interim Energy to be delivered to
Indianapolis Company and the time of delivery thereof, subject to the rate
of delivery limit specified in subsection 2.1 of this Service Schedule,
shall be scheduled by Indianapolis Company, and the number of kilowatt-hours
of such Interim Energy so scheduled during each clock-hour shall be recorded
as provided for in Article 6 of this Agreement.  The aggregate number of
kilowatt-hours of Interim Energy so recorded for any month shall be used for
the purpose of effecting billings and payments under this Service Schedule
for such month.  Each of the parties shall exercise due diligence and
reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Interim Energy shall be
delivered and taken in accordance with such delivery schedules.

SECTION 4 - COMPENSATION

     4.1  Indianapolis Company shall pay Indiana Company each month for
services provided for under this Service Schedule upon the bases of the
billing factors determined for such month and as hereinbelow provided:

     Minimum Charge

     For services provided for under this Service Schedule, Indianapolis
Company shall pay Indiana Company a Minimum Charge each calendar month of
$1.56 per kilowatt of Interim Contract Demand.

     Energy Charges

          The charge for the total kilowatt-hours taken up to a
            quantity equal to 100 times the Interim Contract
            Demand is included in the Minimum Charge specified above.

          For the remaining kilowatt-hours taken, the charge per
            kilowatt-hour shall be ...........................2.00 mills

     Interim Energy Account

     4.2  If, during any calendar month, the kilowatt-hours ofInterim
Energy delivered by Indiana Company to Indianapolis Company under this
Service Schedule are less than the product of 100 hours and the Interim
Contract Demand, the number of kilowatt-hours of Interim Energy paid for by
Indianapolis Company for such month pursuant to subsection 4.1 above that
were not actually delivered to Indianapolis Company shall be set up in an
account (herein called Interim Energy Account) to the credit of Indianapolis
Company.  During any subsequent month that there is a balance of
kilowatt-hours remaining to the credit of Indianapolis Company in such
Interim Energy Account and the kilowatt-hours of Interim Energy delivered to
Indianapolis Company for such month are in excess of the product of 100
hours and the Interim Contract Demand for such month, a quantity of
kilowatt-hours equal to (1) such excess kilowatt-hours or (2) the balance of
kilowatt-hours remaining to the credit of Indianapolis Company in the
Interim Energy Account, whichever amount is the smaller, shall be billed to
Indianapolis Company at no charge therefor, and the Interim Energy Account
shall be charged with such number of kilowatt-hours so billed to
Indianapolis Company.

SECTION 5 - MODIFICATION

     5.1  The following terms wherever used in this Service Schedule shall
have the following meanings:

          5.11  Principal Stations - The steam-electric generating
     stations of Indiana Company known as Breed, Tanners Creek, and Twin
     Branch and any new principal steam-electric generating stations
     (exclusive of nuclear power stations) that may be placed in service by
     Indiana Company.

          5.12  Account No. 501 Fuel - The production expense account of
     the Uniform System of Accounts prescribed for Public Utilities and
     Licensees by the Federal Power Commission as prevailing during
     January, 1961.

          5.13  Weighted average Fuel Cost - The total of all the
     components of cost at all the Principal Stations chargeable to Account
     No. 501 Fuel during a specified period divided by the total millions
     of Btu in fuel charged to said account at all the Principal Stations
     during such period, expressed in cents per million Btu.

          5.14  Weighted average Fuel Consumption - The total Btu in fuel
     charged to Account No. 501 Fuel, at the Principal Stations during a
     specified period divided by the total kilowatt-hour net generation at
     all the Principal Stations during such period, expressed in Btu per
     kilowatt-hour.

     5.2  If, at any time during the term hereof, should the weighted
average fuel cost exceed twenty-two and one-half cents ($0.225) per million
Btu, then in such event the charges provided for in Section 4 of this
Service Schedule shall be appropriately modified so as to compensate Indiana
Company for such weighted average fuel cost in excess of twenty and one-half
cents ($0.205) per million Btu.  Determination of the appropriate
modification in charges shall take into account changes in weighted average
fuel consumption.

SECTION 6 - BILLINGS AND PAYMENTS

     6.1  Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7 of this agreement.

                        Modification No. 2

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            ___________

                       Dated August 1, 1967

                             CONTENTS

SECTION                                                        PAGE

     Preamble-------------------------------------------------   1

1.   Interconnections-----------------------------------------   1

2.   Interconnected Operation---------------------------------   2

3.   Services-------------------------------------------------   2

4.   Delivery Points------------------------------------------   3

5.   Metering-------------------------------------------------   3

6.   Other Terms and Conditions-------------------------------   3

7.   Regulatory Authorities-----------------------------------   3

8.   Assignment-----------------------------------------------   3

APPENDIX
 I.  Service Schedule H - Petersburg--------------------------   5
     Power to Indiana Company

II.  Facilities Schedule - Description------------------------   9
     of Transmission Line and Station
     Facilities Provided and to be
     Provided by Indiana Company and
     Indianapolis Company

     THIS AGREEMENT, made and entered into as of the 1st day of August,
1967, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company) also an Indiana corporation,

                            WITNESSETH,

                               THAT:

     WHEREAS, Indianapolis Company and Indiana Company entered into an
interconnection agreement, dated December 30, 1960, (herein called 1960
Agreement); and

     WHEREAS, by agreement dated November 14, 1963, the parties entered
into Modification No. 1 to the 1960 Agreement (Modification No. 1); and

     WHEREAS, the parties have studied their respective load and generating
capacity situations and so as to more effectively adapt the provisions of
the 1960 Agreement to future load and capacity situations have reached
certain understandings with respect to further modification of the 1960
Agreement; and

     WHEREAS, in view of such understandings, the parties desire that the
1960 Agreement as modified by Modification No. 1 be further modified as
hereinafter set forth;

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

     SECTION 1.  Interconnections.  Article 1 of the 1960 Agreement is
hereby modified to read:

                            "ARTICLE 1

                         INTERCONNECTIONS

     1.01  The respective systems of the parties shall be interconnected at
the interconnection points hereinbelow defined and as hereinafter provided
for in this Article 1.  In furtherance thereof, the parties shall own and
provide the transmission facilities in their systems, i.e., transmission
lines and essential terminal equipment, as described in the Facilities
Schedule attached hereto as Appendix II and made a part of this agreement.
The interconnections to be so provided shall be at the points hereinbelow
set forth; viz.:  (Reference to any line, station, or substation in this
Article 1 is consistent with the designation for any such line, station, or
substation set forth in the Facilities Schedule.)

          1.011  Hanna Interconnection Point, the point at Indianapolis
     Company's Hanna Substation where the terminal facilities provided
     therefor by Indianapolis Company shall connect to Indiana Company's
     Tanner's Creek-Hanna-De Soto Line.

          1.012  Breed Interconnection Point, the point at Indiana
     Company's Breed Station where the terminal facilities provided
     therefor by Indiana Company shall connect to Indianapolis Company's
     Petersburg-Breed Line.

     SECTION 2.  Interconnected Operation.  Section 2.01 of Article 2 of
the 1960 Agreement is hereby modified to read:

          "2.01  The systems of the parties, subject to the provisions of
this Section 2.01, shall be operated in continuous synchronism through the
interconnected facilities used to establish the Hanna and Breed
Interconnection Points.  If synchronous operation of the systems through a
particular 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 so as 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."

     SECTION 3.  Services.  Section 3.03 of Article 3 of the 1960 Agreement
is hereby modified to read:

          "3.03  The following service schedules are agreed to and hereby
     made a part of this agreement:

          Service Schedule A - Firm Power to Indianapolis Company
          Service Schedule B - Emergency Service
          Service Schedule C - Coordination of Scheduled Maintenance of
                                 Generating Facilities
          Service Schedule D - Energy Transfer
          Service Schedule E - Interchange Power
          Service Schedule F - Short Term Power
          Service Schedule G - Interim Power to Indianapolis Company
          Service Schedule H - Petersburg Power to Indiana Company."

Service Schedule H is attached hereto as Appendix I.

     SECTION 4.  Delivery Points.  Section 5.01 of Article 5 of the 1960
Agreement is hereby modified to read:

          "5.01  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 nominal unregulated voltage designated
     for the interconnection points as defined under Article 1 above and at
     such other points and voltages as may be agreed upon by the parties."

     SECTION 5.  Metering.  Section 5.02 of Article 5 of the 1960 Agreement
is hereby modified to read:

          "5.02  Electric power and energy supplied and delivered under
     this agreement shall be measured by suitable metering equipment
     provided, owned, and, maintained by the owner at the metering points
     as hereinbelow set forth and at such other points as may be agreed
     upon by the parties; viz.:

               5.021  In respect of the Hanna Interconnection Point by
          138,000-volt metering equipment owned by Indianapolis Company
          and installed at Indianapolis Company's Hanna Substation,
          provided, however, that such metering equipment will be replaced
          by 345,000-volt metering equipment on and after the date
          provided for in subsection 5.1 of Appendix II.

               5.022  In respect of the Breed Interconnection Point by
          345,000-volt metering equipment owned by Indiana Company and
          installed at Indiana Company's Breed Station.

     SECTION 6.  Other Terms and Conditions.  Except as hereinabove
modified and amended, the terms and conditions of the 1960 Agreement and
Modification No. 1 shall remain in full force and effect.

     SECTION 7.  Regulatory Authorities.  This agreement is made subject to
the jurisdiction of any governmental authority or authorities having
jurisdiction in the premises.

     SECTION 8.  Assignment.  This agreement shall inure to the benefit of
and be binding upon the successors and assigns of the respective parties.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ O.T. Fitzwater
                       O.T. Fitzwater
                       Chairman of the Board

Attest:

/s/ Ralph W. Husted
Ralph W. Husted
Secretary

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ Donald C. Cook
                        Donald C. Cook, President

Attest:

/s/ M.P. McGlone
M.P. McGlone
Assistant Secretary

                                            Appendix I

                        SERVICE SCHEDULE H

                PETERSBURG POWER TO INDIANA COMPANY

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company), and Indiana & Michigan Electric Company (Indiana Company), made
and entered into as of the 1st day of August, 1967, shall become effective
on the day herein defined as Petersburg Unit No. 2 Commercial Date, and
shall continue in effect until April 30, 1971.

SECTION 2 - PETERSBURG POWER

     2.1  Indianapolis Company shall sell and deliver and Indiana Company
shall take and pay for, on the terms and conditions provided for under this
agreement, electric power (Petersburg Power) and associated electric energy
(Petersburg Energy).  Throughout the duration of this Service Schedule,
Indianapolis Company shall stand ready, subject to the provisions of this
agreement, to deliver to Indiana Company Petersburg Power and Petersburg
Energy in any amount desired by Indiana Company up to a maximum rate of
delivery equal to the Petersburg Entitlement as defined in subsection 3.16
of this Service Schedule.

SECTION 3 - DEFINITIONS

     3.1  The following terms when used herein shall have the meanings
specified:

          3.11  "Petersburg Unit No. 2" means the second steam-electric
     generating unit which is to be placed in service at Petersburg
     Station.

          3.12  "Petersburg Unit No. 2 Nominal Rating" means the net
     capability designated for such unit by the manufacturer, i.e., 450,000
     kilowatts.

          3.13  "Petersburg Unit No. 2 Predicted Capability" at any time
     means the net capability of such unit determined by such methods and
     procedures as may be mutually agreed upon.

          3.14  "Petersburg Unit No. 2 Capability Ratio" at any time means
     the ratio of Petersburg Unit No. 2 Predicted Capability at such time
     to Petersburg Unit No. 2 Nominal Rating.

          3.15  "Petersburg Contract Demand" means 200,000 kilowatts.

          3.16  "Petersburg Entitlement" at any time means the lesser of
     either 200,000 kilowatts or the product of the Petersburg Unit No. 2
     Capability Ratio at such time and 200,000 kilowatts. The term defined
     in this subsection 3.16 and the conditions for the supply of
     Petersburg Power as set forth in subsection 2.1 shall be understood to
     mean that Indianapolis Company is obligated to supply Petersburg Power
     in amounts up to and including 200,000 kilowatts and associated energy
     upon request of Indiana Company at any time that the Petersburg Unit
     No. 2 net capability is not less than 450,000 kilowatts. Whenever the
     capability of such unit is reduced by forced or scheduled outages of
     components, or some other bonafide reason, the obligation of
     Indianapolis Company to supply and of Indiana Company to take
     Petersburg Power will be reduced in the same percentage as the
     percentage reduction in capability.  Accordingly, whenever such unit
     is not in operation due to forced or scheduled outages there will be
     no obligation to supply or to take Petersburg Power.

          3.17  "Month" means calendar month.

          3.18  "Petersburg Unit No. 2 Commercial Date" means the first
     day of the following month, or on such day if it should be the first
     day of a month, that both Petersburg Unit No. 2 and the transmission
     facilities described in subsections 4.11, 4.13 and 4.15 of the
     Facilities Schedule (Appendix II) are available for commercial
     operation.

          3.19  "Contract Period" means the period from Petersburg Unit
     No. 2 Commercial Date to April 30, 1971 inclusive.

SECTION 4 - PETERSBURG STATION OPERATION AND MAINTENANCE

     4.1  Indianapolis Company shall operate and maintain Petersburg
Station in a manner consistent with safe, prudent, and efficient operating
practice so that the availability to Indiana Company of power and associated
energy from Petersburg Unit No. 2 will be at the highest practicable level
attainable throughout the Contract Period.  Also, throughout such period,
Indianapolis Company and Indiana Company shall coordinate the scheduled
maintenance of their respective generating facilities and will develop
specific plans for the coordination of maintenance covering units at the
Petersburg, Breed, and Tanners Creek Stations.  Schedule maintenance outage
time of Petersburg Unit No. 2 will be held to a reasonable minimum
consistent with standards of sound and efficient practice.  In the event of
a forced outage of Petersburg Unit No. 2, Indianapolis Company shall return
the unit to service as soon as possible.

     4.2  During the Contract Period, maintenance outages shall be
scheduled for Petersburg Unit No. 2, consistent with obligations to the
Indiana Pool (Public Service Company of Indiana, Inc. and Indianapolis
Company), after consultation with Indiana company, so that such outages will
interfere least with operations of Indianapolis Company and Indiana Company.

SECTION 5 - PETERSBURG ENERGY

     5.1  The provisions of Sections 2 and 3 of this Service Schedule
notwithstanding Indiana Company shall schedule and take Petersburg Energy at
a rate of not less than 100,000 kilowatt-hours per hour at any time that
Petersburg Unit No. 2 is in operation with a Predicted Capability at or
above 225,000 kilowatts.

     5.2  The number of kilowatt-hours of Petersburg Energy to be delivered
to Indiana Company and the time of delivery thereof, subject to the rate of
delivery limit specified in subsection 2.1 of this Service Schedule, shall
be scheduled by Indiana Company, and the number of kilowatt-hours of such
Petersburg Energy so scheduled during each clock-hour shall be recorded as
provided for in Article 6 of this agreement.  The aggregate number of
kilowatt-hours of Petersburg Energy so recorded for any month shall be used
for the purpose of effecting billings and payments under this Service
Schedule for such month.  Each of the parties shall exercise due diligence
and reasonable care and foresight in arranging for and operating their
respective power sources so that amounts of Petersburg Energy shall be
delivered and taken in accordance with such delivery schedules.

SECTION 6 - COMPENSATION

     6.1  Indiana Company shall pay to Indianapolis Company each month for
services provided for under this Service Schedule upon the following terms
and conditions:

     Minimum Charge

          For services provided for under this Service Schedule, Indiana
     Company shall pay to Indianapolis Company a minimum charge each month
     of $378,000.

     Energy Charges

          The charge for the total kilowatt-hours taken up to a quantity
     equal to 330 times the Petersburg Contract Demand is included in the
     Minimum Charge specified above.

          For the remaining kilowatt-hours taken, the charge per kilowatt-
     hour shall be.......................................... 1.70 mills

The charges provided for in this Section 6 shall be subject to adjustment in
accordance with the provisions of Section 7 of this Service Schedule.

Petersburg Energy Account

     6.2  If, during any calendar month, the kilowatt- hours of Petersburg
Energy delivered by Indianapolis Company to Indiana Company under this
Service Schedule are less than the product of 330 hours and the Petersburg
Contract Demand, the number of kilowatt-hours of Petersburg Energy paid for
by Indiana Company for such month pursuant to subsection 6.1 above that were
not actually delivered to Indiana Company shall be set up in an account
(herein called Petersburg Energy Account) to the credit of Indiana Company.
During any subsequent month that there is a balance of kilowatt-hours
remaining to the credit of Indiana Company in such Petersburg Energy Account
and the kilowatt-hours of Petersburg Energy delivered to Indiana Company for
such month are in excess of the product of 330 hours and the Petersburg
Contract Demand for such month, a quantity of kilowatt-hours equal to (1)
such excess kilowatt-hours or (2) the balance of kilowatt-hours remaining to
the credit of Indiana Company in the Petersburg Energy Account, whichever
amount is the smaller, shall be billed to Indiana Company at no charge
therefor, excepting such charges as are applicable thereto in accordance
with Section 7 of this Service Schedule, and the Petersburg Energy Account
shall be charged with such number of kilowatt-hours so billed to Indiana
Company.

SECTION 7 - FUEL COST ADJUSTMENT

     7.1  The following terms when used herein shall have the meanings
specified:

          7.11  Account No. 501 Fuel -- The production expense account of
     the Uniform System of Accounts prescribed for Public Utilities and
     Licensees by the Federal Power Commission as prevailing during
     January, 1961.

          7.12  Fuel Cost -- The total cost of all the components of cost
     at the Petersburg Station chargeable to Account No. 501 Fuel during a
     specified period divided by the total millions of Btu in fuel charged
     to said account at the Petersburg Station during such period,
     expressed in cents per million Btu.

     7.2  The charges provided for in Section 6 of this Service Schedule
are based upon a fuel cost of sixteen and one-half cents ($0.165) per
million Btu at the Petersburg Station.  In the event such fuel cost for any
month is above sixteen and one-half cents ($0.165) per million Btu by at
least one mill, an additional charge during the next succeeding month shall
be made on the kilowatt-hours of Petersburg Energy actually delivered during
such succeeding month at a rate of 0.009 mills per kilowatt-hour for each
full mill increase in such fuel cost above sixteen and one-half cents
($0.165) per million Btu.  In the event such fuel cost for any month is less
than sixteen and one-half cents ($0.165) per million Btu by at least one
mill, the bill rendered to Indiana Company for the next succeeding month
shall be decreased by an amount equal to the kilowatt-hours of Petersburg
Energy actually delivered during such succeeding month at a rate of 0.009
mills per kilowatt-hour for each full mill decrease in such fuel cost below
sixteen and one-half cents ($0.165) per million Btu.

SECTION 8 -- BILLINGS AND PAYMENTS

     8.1  Billings and payments for the purposes of effecting settlements
under this Service Schedule shall be made in accordance with and subject to
the terms and conditions of Article 7.

SECTION 9 -- TAXES

     9.1  It is expressly agreed and made a provision of this Service
Schedule that if at any time during the term hereof there should be levied
and/or assessed against Indianapolis Company any direct tax by any taxing
authority on the Petersburg Power and/or Petersburg Energy manufactured,
generated, produced, converted, sold, purchased, transmitted, interchanged,
exchanged, exported or imported by Indianapolis Company, in addition to or
different from the forms of such direct taxes now being levied and/or
assessed against Indianapolis Company or any increase in the rate of such
existing or future direct taxes, which Indianapolis Company could
demonstrate to be unduly burdensome to it in the performance of the
obligations herein provided, then in such event, the parties shall endeavor
to make such an agreement in regard to sharing the burden created by such
tax as appears to be equitable and proper under the circumstances.

                                           Appendix II

                        FACILITIES SCHEDULE

Description of Transmission Line and Station Facilities Provided and
    To Be Provided by Indiana Company and Indianapolis Company

         Under Agreement, dated December 30, 1990, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Facilities Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company), made and
entered into as of the 1st day of August, 1967, shall continue in effect
throughout the duration of the agreement of which it is a part.

SECTION 2 - GENERAL

     2.1  This Facilities Schedule is included in this agreement for the
purpose of identifying the transmission line and station facilities provided
and to be provided by Indiana Company and Indianapolis Company pursuant to
Article 1 of the 1960 Agreement.

SECTION 3 - HANNA INTERCONNECTION POINT

     3.1  Indiana Company shall continue to own and provide at its own
expense the following described facilities; viz.:

          3.11  A 345,000-volt single circuit steel tower
transmission
     line (hereby designated and herein called Tanners Creek-Hanna-De Soto
     Line), approximately 138 miles in length, constructed with two 954,000
     cm ACSR conductors per phase, and suitable ground wires, extending in
     a generally northerly direction from Indiana Company's Tanners Creek
     Station via Indianapolis Company's Hanna Substation, located near
     Indianapolis, to Indiana Company's De Soto Substation, located near
     Muncie.

          3.12  On the 345,000-volt double circuit steel tower
     transmission line that extends from Tanners Creek Station to Indiana
     Company's Sorenson Substation, a second 345,000-volt circuit extending
     from De Soto Substation to Sorenson Substation, approximately 48 miles
     in length, with main conductors of 1.75 inches diameter 1,414,000 cm
     ACSR expanded conductor.

          3.13  At Tanners Creek Station, the necessary terminal
     equipment, including facilities suitable for the control of the
     Tanners Creek-Hanna-De Soto Line described in subsection 3.11 above
     and essential to the protection of line and station equipment; such
     terminal equipment includes one 345,000-volt ultra-high speed
     automatic reclosing circuit breaker, appurtenant disconnecting and
     associated equipment, carrier current relays and associated carrier
     current equipment, and every item required and suitable for the
     control of said line and for the coordination of such control with
     terminal equipment provided and to be provided by Indianapolis Company
     pursuant to subsections 3.21 and 3.31 below.

          3.14  At Tanners Creek Station and other suitable locations,
     such communication, telemetering, and load control facilities
     determined by the parties as necessary for the proper and efficient
     interconnected operation of the parties' systems.

3.2  Indianapolis Company shall continue to own and provide at its own
expense the following described facilities until modified as provided in
subsection 3.3 below; viz.:

          3.21  At Hanna Substation, the necessary terminal equipment,
     including facilities suitable for the control of the Tanners
     Creek-Hanna-De Soto Line and essential to the protection of line and
     station equipment; such terminal equipment includes one
     345,000/138,000-volt, three-phase auto-transformer having a nominal
     rating of 250,000 kilovolt-amperes, two 138,000-volt ultra-high speed
     automatic reclosing circuit breakers, appurtenant disconnecting and
     associated equipment, carrier current relays and associated carrier
     current equipment, and every item required and suitable for the
     control of said line and for the coordination of such control with
     terminal equipment provided by Indiana Company pursuant to subsection
     3.13 above.

          3.22  At Hanna Substation, such suitable 138,000-volt metering
     equipment as described in Section 5.03 of Article 5 of the 1960
     Agreement.

          3.23  At Hanna Substation and other suitable locations, such
     communication, telemetering, and load control facilities determined by
     the parties as necessary for the proper and efficient interconnected
     operation of the parties' systems.

3.3  Indianapolis Company shall install, or cause to be installed, own and
provide at its own expense the following described facilities on and after
the date provided for in subsection 5.1 of this Appendix II; viz.:

          3.31  At Hanna Substation, the necessary terminal equipment
     including facilities suitable for the independent control of the
     Hanna-Desoto and Hanna-Tanners Creek sections of the Tanners
     Creek-Hanna-Desoto Line, for the control of the Thompson-Hanna Line
     described in subsection 4.12 below and essential to the protection of
     line and station equipment.  Such terminal equipment shall include two
     345,000/138,000-volt, three-phase auto-transformers having an
     aggregate nominal rating of not less than 525,000 kilovolt-amperes and
     not less than three 345,000-volt ultra-high-speed automatic reclosing
     circuit breakers, appurtenant disconnecting and associated equipment,
     carrier current relays and associated carrier current equipment, and
     every item required and suitable for the control of the Hanna-Desoto,
     Hanna-Tanners Creek and Thompson-Hanna Lines, for the coordination of
     such control with terminal equipment provided by Indiana Company at
     the Tanners Creek and Desoto Substations and for coordination of
     controls to assure satisfactory and reliable operation of the
     Breed-Petersburg-Thompson-Hanna 345,000-volt transmission link
     described in subsections 4.11 and 4.12 below.

          3.32  At Hanna Substation, such suitable 345,000-volt metering
     equipment as described in Section 5.03 of Article 5 of the 1960
     Agreement.

          3.33  AT Hanna Substation and other suitable locations, such
     communication, telemetering, and load control facilities determined by
     the parties as necessary for the proper and efficient operation of the
     parties' systems.

     3.4  The Hanna Interconnection Point shall be that point at Hanna
Substation where the terminal facilities provided therefor by Indianapolis
Company shall be connected to the Tanners Creek-Hanna-De Soto Line.

SECTION 4 -- BREED INTERCONNECTION POINT

     4.1  Indianapolis Company shall install, or cause to be installed, own
and provide at its own expense the following described facilities; viz.:

          4.11  A 345,000-volt single circuit steel tower transmission
     line (hereby designated and herein called Petersburg-Breed Line),
     approximately 55 miles in length, constructed with two 954,000 cm ACSR
     conductors per phase or with conductors of at least equivalent
     conductivity and suitable ground wires, to extend in a generally
     northerly direction from Indianapolis Company's Petersburg Station to
     Indiana Company's Breed Station.

          4.12  A 345,000-volt single circuit steel tower transmission
     line (hereby designated and herein called Thompson-Hanna Line),
     approximately 19 miles in length, constructed with two 954,000 cm ACSR
     conductors per phase or with conductors of at least equivalent
     conductivity, and suitable ground wires, to extend in a generally
     easterly direction from Indianapolis Company's Thompson Substation,
     located near Indianapolis at the intersection of Thompson Road with
     the Marion-Hendricks County line, to Hanna Substation.  Said Thompson
     Substation shall be installed in the Indianapolis Company's
     345,000-volt line extending from its Petersburg Station to
     Indianapolis Company's Guion Substation located near Indianapolis at
     4000 West 56th Street.

          4.13  At Petersburg Station, the necessary terminal equipment
     including facilities suitable for the control of the Petersburg-Breed
     Line and essential to the protection line and station equipment.  Such
     terminal equipment shall include not less than one 345,000-volt
     ultra-high-speed automatic reclosing circuit breaker, appurtenant
     disconnecting and associated equipment, carrier current relays and
     associated carrier current equipment, and every item required and
     suitable for the control of said line and for the coordination of such
     control with terminal equipment to be provided by Indiana Company
     pursuant to subsection 4.21 below.

          4.14  Necessary and appropriate terminal facilities including
     345,000-volt ultra-high-speed automatic reclosing circuit breakers and
     protective equipment at Hanna and Thompson Substations and Petersburg
     Station in order to assure satisfactory and reliable operation of the
     Breed-Petersburg-Thompson-Hanna 345,000-volt transmission link.

          4.15  At Petersburg Station and other suitable locations, such
     communication, telemetering, and load control facilities determined by
     the parties as necessary for the proper and efficient interconnected
     operation of the parties' system.

     4.2  Indiana Company shall install, or cause to be installed, own and
provide at its own expense the following described facilities, viz.:

          4.21  At Breed Station, the necessary terminal equipment
     including facilities suitable for the control of the Petersburg-Breed
     Line and essential to the protection of line and station equipment.
     Such terminal equipment shall include not less than one 345,000-volt
     ultra-high-speed automatic reclosing circuit breaker, appurtenant
     disconnecting and associated equipment, carrier current relays and
     associated carrier current equipment, and every item required and
     suitable for the control of said line and for the coordination of such
     control with terminal equipment to be provided by Indianapolis Company
     pursuant to subsection 4.13 above.

          4.22  The Breed Interconnection Point shall be that point at
     Breed Station where the terminal facilities provided therefor by
     Indiana Company shall be connected to the Petersburg-Breed Line.

SECTION 5 --COMMON FACILITIES OBLIGATIONS

     5.1  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 and
the installation of the facilities to be provided by the parties, as
hereinabove described in subsection 3.3 and Section 4, the installation of
such facilities shall be completed and in service on or before July 1, 1968.
Should the installation of a particular portion of said facilities be
delayed beyond the date so designated due to the aforesaid causes it shall
nevertheless be completed as soon thereafter as practicable.

     5.2  The parties shall cooperate with one another so as to assure the
maximum practicable coordination of design of the facilities to be installed
by each of them with new and existing facilities of the other.

     5.3  The parties shall each keep, or shall cause to be kept, the
lines, together with all associated equipment and appurtenances, described
in this Facilities Schedule that are located on their respective sides of
the interconnection points 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.

SECTION 6--FUTURE TRANSMISSION FACILITIES

6.1  The provision of facilities by each party as set forth above is
governed by (1) the desired interconnection capacity as it relates to
services to be furnished under this agreement and (2) the correlated overall
transmission requirements of each party that may be reasonably foreseen as
of the day first above written.  The expansion of the parties respective
transmission systems during the duration of this agreement consistent with
sound engineering and economic practices, may dictate that a party add to,
replace, relocate, or remove portions of facilities so provided by it.
Either party shall have the right to so add to, replace, relocate, or remove
portions of facilities so provided by it; subject, however, to the
understanding that in so doing such party does not reduce the transmission
capacity of the interconnections hereinabove described or interfere with the
performance of this agreement in complete accord with its terms and
conditions.

                        Modification No. 3

                                to

                     INTERCONNECTION AGREEMENT
                      Dated December 30, 1960

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                   Dated as of February 1, 1971

     THIS AGREEMENT, made and entered into as of the first day of February,
1971, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis Company), an
Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY (Indiana
Company), also an Indiana corporation;

                            WITNESSETH,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, and modifications
thereto, dated November 14, 1963 and August 1, 1967, (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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.  Subsection 3.11 of Service Schedule F of the 1960
Agreement is hereby modified to read:

          "3.11  Demand Charge

          For the billing demand for each week, at the rate of $0.40 per
     kilowatt for such week.  In the event the amount of Short Term Energy
     taken is reduced upon request of the supplying party, the demand
     charge for the week during which such reduction is made shall be
     reduced by one-sixth (1/6) of the aforesaid weekly demand charge per
     kilowatt of reduction for each day (other than any Sunday) during
     which any reduction is in effect."

     SECTION 2.  This Modification No. 3 shall be effective from the date
hereinabove first written to the expiration of Service Schedule F of the
1960 Agreement.

     SECTION 3.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     SECTION 4.  This agreement is made subject to the jurisdiction of any
governmental authority or authorities having jurisdiction in the premises.

     SECTION 5.  This agreement shall inure to the benefit of and be
binding upon the successor and assigns of the respective parties.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ O.T. Fitzwater
                       O.T. Fitzwater
                       Chairman of the Board

ATTEST:

/s/ Ralph W. Husted
Ralph W. Husted, Secretary

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ G.V. Paterson
                       Vice President

ATTEST:

/s/ signature illegible
Assistant Secretary

                        Modification No. 4

                                to

                     INTERCONNECTION AGREEMENT
                      Dated December 30, 1960

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                   Dated as of September 1, 1972

     THIS AGREEMENT, made and entered into as of the first day of
September, 1972, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                            WITNESSETH,

     WHEREAS, Indianapolis Company entered into an Interconnection
Agreement, dated December 30, 1960, and modifications thereto, dated
November 14, 1963, August 1, 1967 and February 1, 1971 (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;

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

     SECTION 1.  Service Schedule B--Emergency Service, Service Schedule F-
-Short Term Power, and Service Schedule G--Interim Power to Indianapolis
Company are hereby cancelled and a new Service Schedule B--Emergency Service
and a new Service Schedule F--Short Term Power are substituted for said
Service Schedule B and F, respectively.  A new Service Schedule I--Limited
Term Power (Firm) is hereby agreed to.  The new Service Schedules B, F and I
are attached hereto as Appendix I, Appendix II, and Appendix III,
respectively.

     SECTION 2.  Section 3.03 of Article 3 of the 1960 Agreement is hereby
modified to read:

          "3.03  The following service schedules are agreed to and hereby
     made a part of this agreement:

          Service Schedule A--Firm Power to Indianapolis
          Service Schedule B--Emergency Service
          Service Schedule C--Coordination of Schedule Maintenance of
                                Generating Facilities
          Service Schedule D--Energy Transfer
          Service Schedule E--Interchange Power
          Service Schedule F--Short Term Power
          Service Schedule I--Limited Term Power (Firm)

     SECTION 3.  Article 3 of the 1960 Agreement is further modified by the
addition thereto of the following Section 3.04:

          "3.04  As used in the Schedules of this Agreement the
     out-of-pocket cost of providing energy means all operating,
     maintenance, tax, and other expenses incurred, as of the Delivery
     Points and taking into account transmission losses, if any, that would
     not have been incurred if the energy had not been supplied."

     SECTION 4.  The 1960 Agreement, as hereinbefore modified is made
subject to the jurisdiction of any governmental authority or authorities
having jurisdiction in the premises and either party may, at any time or
from time to time, unilaterally take any action before or with such
authorities with respect to any terms or conditions of this Agreement that
it deems desirable and in such event the terms and conditions under which
service shall be rendered hereunder shall be the terms and conditions
authorized by such authority provided, however, that no such action shall be
taken by such party except after 60 days prior written notice to the other
party of its intention to do so.

     SECTION 5.  This Modification No. 4 shall be effective from the date
hereinbefore first written to the expiration of the 1960 Agreement.

     SECTION 6.  Except as hereinbefore modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     SECTION 7.  This agreement shall insure to the benefit of and be
binding upon the successors and assigns of the respective parties.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Edwin L. Cassidy
                       President

ATTEST:

/s/ Ralph W. Husted
Secretary

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By /s/ G.V. Patterson
                      Vice President

ATTEST:

/s/ William E. Olson
Assistant Secretary

                                       APPENDIX I

                        SERVICE SCHEDULE B

                         EMERGENCY SERVICE

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on September 1, 1972 and shall continue throughout the
duration of the agreement of which it is a part.

SECTION 2 - SERVICES TO BE RENDERED

     2.1  Subject to the provisions of subsection 2.2 of this Section 2, in
the event of an emergency on the system of either party jeopardizing its
ability to meet its native load and other firm commitments, the other party
shall, upon request, deliver during a period of not exceeding 48 consecutive
hours to the requesting party electric energy ("Emergency Energy") in
amounts up to a rate of 50,000 kilowatthours per hour and such additional
amounts as in its sole judgement can be delivered without imposing burdens
on its system's operations.  Either party may, upon request, deliver energy
hereunder in the event of an emergency jeopardizing the ability of a system
interconnected with the system of the requesting party to meet its native
load and other firm commitments.  Every request hereunder shall identify the
emergency that gave rise to it.

     2.2  Neither party shall be obligated to deliver energy hereunder
during the first 48 hours following a prior emergency during which it is
delivering electric energy under another mutual emergency interchange
agreement or at any time that delivery of such energy will impair its own
system's ability to meet its native load and other firm commitments.

SECTION 3 --COMPENSATION

     3.1  Emergency Energy shall be settled for, at the option of the party
supplying it, either by the return of equivalent energy upon request of such
party or by payment of the greater of (a) 110% of the out-of-pocket cost of
supplying it, and (b) 17.5 mills per kilowatt-hour thereof.

                                       APPENDIX II

                        SERVICE SCHEDULE F

                         SHORT TERM POWER

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective September 1, 1972 and shall continue in effect throughout
the duration of the agreement of which it is a part subject to the
provisions of Section 4 hereof.

SECTION 2 - SERVICES TO BE RENDERED

     2.1  Either party may reserve from the other party, for periods of one
or more weeks or for periods less than one week, electric power ("Short Term
Power") whenever, in the sole judgment of the party requested to reserve the
same, such power is available.  As used herein the term "week" shall mean
any seven consecutive days.

          2.11  Prior to each reservation of Short Term Power, the number
     of kilowatts to be reserved, the period of the reservation, and the
     source of the power if the supplying party is in turn reserving them
     from another system, shall be determined by the parties. Such
     determination shall be confirmed in writing.  If during such period
     conditions arise that could not have been reasonably foreseen at the
     time of the reservation and cause the reservation to be burdensome to
     the supplying party, such party may by written notice to the reserving
     party, or oral notice later confirmed in writing, reduce the number of
     kilowatts reserved by such amount and for such time as it shall
     specify in such notice, but kilowatts reserved hereunder that the
     supplying party is in turn reserving from another system may be
     reduced only to the extent they are reduced by such other system.

          2.12  During each period that Short Term Power has been
     reserved, the party that has agreed to supply such power shall upon
     call provide Short Term Power up to and including the number of
     kilowatts then reserved and deliver electric energy ("Short Term
     Energy") to the reserving party at a rate during each hour of up to
     and including such number.

SECTION 3--COMPENSATION

     3.1  The reserving party shall pay the supplying party:

          3.11  for any week that Short Term Power is reserved, $0.40 per
     kilowatt reserved less, for each day during any part of which the
     amount of such Short Term Power is reduced (other than Sunday) by the
     supplying party, one-sixth of said $0.40 per kilowatt of the
     reduction.  (Except that in no event shall the total of such
     deductions in any week exceed $0.40 per kilowatt.) For each period
     less than one week that Short Term Power is reserved, $0.10 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,
     $0.10 per kilowatt of the reduction; plus

          3.12  for each kilowatt of the reserved Short Term Power that is
     purchased by the supplying party from another system, prearranged in
     accordance with subsection 2.11 of this schedule (a) the excess, if
     any, of the amount paid therefor by the supplying party over the
     charge therefor under Section 3.11 of this Schedule (or if such amount
     is less than such charge, minus the deficiency) plus (b) for each week
     such Short Term Power is reserved, $0.125 per kilowatt less, for each
     day (other than Sunday) during any part of which any of such Short
     Term Power is not received from such other system, $0.021 per kilowatt
     not received.  (Except that in no event shall the total of such
     deductions in any week exceed $0.125 per kilowatt.); plus

          3.13  110% of the out-of-pocket cost of supplying Short Term
     Energy called for during such periods under subsection 2.12 of this
     Schedule that comes from the supplying party's own system and 115% of
     the out-of-pocket cost of supplying all other such Short Term Energy.

SECTION 4 -- TERMINATION

     4.1  Either party upon one year prior written notice to the other may
terminate this Schedule.

                                   APPENDIX III

                        SERVICE SCHEDULE I

                     LIMITED TERM POWER (FIRM)

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

SECTION 1 - DURATION

     1.1  This Service Schedule, a part of and under agreement, dated
December 30, 1960, between Indianapolis Power & Light Company (Indianapolis
Company) and Indiana & Michigan Electric Company (Indiana Company) shall
become effective on September 1, 1972 and shall continue throughout the
duration of the agreement of which it is a part subject to the provisions of
Section 4 hereof.

SECTION 2 -- SERVICES TO BE RENDERED

     2.1  Either party may arrange to reserve from the other party, for
periods of not less than one or more than 12 months, such electric power
("Limited Term Power (Firm)") whenever, in the sole judgment of the party
requested to reserve the same, such power is available.

          2.11  Prior to each reservation of Limited Term Power (Firm) the
     number of kilowatts to be reserved, the period of the reservation, and
     the source of the power if the supplying party is in turn reserving
     them from another system, shall be determined by the parties.  Such
     determination shall be confirmed in writing.

          2.12  During each period that Limited Term Power (Firm) has been
     reserved, the party that has agreed to supply power shall upon call
     provide Limited Term Power (Firm) up to and including the number of
     kilowatts then reserved and deliver electric energy ("Limited Term
     Energy (Firm)") to the reserving party at a rate during each hour of
     up to and including such number, except when such deliveries would in
     the judgment of the supplying party have to be interrupted or reduced
     to preserve the integrity of or to prevent or limit any instability on
     its system.

SECTION 3--COMPENSATION

     3.1  The reserving party shall pay the supplying party

          3.11  for any month that Limited Term Power (Firm) is reserved,
     $2.15 per kilowatt reserved; plus

          3.12  for each kilowatt of the reserved Limited Term Power
     (Firm) purchased by the supplying party from another system,
     prearranged in accordance with subsection 2.11 of this Schedule, (a)
     the excess, if any, of the amount paid therefor by the supplying party
     over the charge therefor under Section 3.11 of this Schedule (or, if
     such amount is less than such charge, minus the deficiency) plus (b)
     for each month such Limited Term Power (Firm) is reserved $0.55 per
     kilowatt; plus

          3.13  110% of the out-of-pocket cost of supplying Limited Term
     Energy (Firm) called for during such period under subsection 2.2 of
     this Schedule that comes from the supplying party's own system and
     115% of the out-of-pocket cost of supplying all other such Limited
     Term Energy (Firm), prearranged in accordance with subsection 2.11 of
     this Schedule.

SECTION 4--TERMINATION

     4.1  Either party upon one year prior written notice to the other may
terminate this Schedule; however, all prior commitments covered by this
Schedule must be fulfilled.

                        Modification No. 6

                                to

                     INTERCONNECTION AGREEMENT
                     Dated December 30, 1960,
                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                      Dated as of May 1, 1974

     THIS MODIFICATION NO. 6, made and entered into as of the first day of
May, 1974, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                            WITNESSETH,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971 and
September 1, 1972, (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and

     WHEREAS, another proposed modification, being Modification No. 5
providing for a Fuel Conservation Power and Energy Rate, was tentatively
filed with the Federal Power Commission by Indianapolis Company on April 4,
1974 and subsequently withdrawn by letter dated May 22, 1974, Indiana
Company never having executed such modification or concurred in such filing;
and

     WHEREAS, the parties desire to further modify the 1960 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.  Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.40 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.45, and is also hereby
modified by the deletion therefrom of the dollar quantity $0.10 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.11.

     Section 2.  Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.15 and by the substitution
therefor of the dollar quantity $2.50.

     Section 3.  The 1960 Agreement, as amended hereby, is made subject to
the jurisdiction of any governmental authority or authorities having
jurisdiction in the premises and either party may, at any time or from time
to time, unilaterally take any action before or with such authorities with
respect to any terms or conditions of the 1960 Agreement, as amended hereby,
that it deems desirable, and in such event the terms and conditions
authorized by such authority; provided, that no such action shall be taken
by such party except after 60 days prior written notice to the other party
of its intention to do so.

     Section 4.  This Modification No. 6 shall be effective from the date
first above-written to the expiration date of the 1960 Agreement.

     Section 5.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 6.  This Modification No. 6 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties hereto.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Edwin L. Cassidy
                          President
Attest:

/s/ Marcus E. Woods
     Secretary

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ G.V. Patterson
                            Vice President

Attest:

/s/  W.E. Olson
Assistant Secretary

                        MODIFICATION NO. 7

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960
                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                AND

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                     Dated as of April 1, 1976

     THIS MODIFICATION NO. 7, made and entered into as of the first day of
April, 1976, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                       W I T N E S S E T H ,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, and May 1, 1974, (said Interconnection Agreement, as so
modified, being herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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.  Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.45 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.50, and is also hereby
modified by the deletion therefrom of the dollar quantity $0.11 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.125.

     Section 2.  Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.50 and by the substitution
therefor of the dollar quantity $2.75.

     Section 3.  The 1960 Agreement as hereinabove modified and
supplemented by the parties, is made subject to the jurisdiction of any
governmental authorities having jurisdiction in the premises, and any party
may, at any time or from time to time, unilaterally take any action before
or with such authorities with respect to any terms or conditions of the 1960
Agreement as hereinabove modified or supplemented, and as it may at any time
hereafter be modified and supplemented, and as it may at any time hereafter
be modified and supplemented by the parties, that it deems desirable, and in
such event the terms and conditions under which service shall be rendered
hereunder shall be the terms and conditions authorized by such authority.

     Section 4.  This Modification No. 7 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 5.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 6.  This Modification No. 7 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties hereto.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By /s/ Ralph W. Husted, Chairman and
                         Chief Executive Officer

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By /s/ G.V. Patterson
                       Vice President

                        Modification No. 8

                                to

                     INTERCONNECTION AGREEMENT

                     Dated December 30, 1960,

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                     Dated as of March 1, 1977

     THIS MODIFICATION NO. 8, made and entered into as of the first day of
March, 1977, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                            WITNESSETH,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971 and
September 1, 1972, May 1, 1974 and April 1, 1976 (said Interconnection
Agreement, as so modified, being herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth, the parties agree as follows:

     Section 1.  Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity $0.50 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.60 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.125 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.15.

     Section 2.  Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.125 and $0.021 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.15 and $0.025, respectively.

     Section 3.  Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $2.75 and by the substitution
therefor of the dollar quantity $3.25.

     Section 4.  Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power of the 1960 Agreement is hereby modified and supplemented
by the deletion therefrom of the dollar quantity $0.55 wherever it appears
therein and by the substitution therefor of the dollar quantity $0.65.

     Section 5.  The 1960 Agreement as hereinabove modified and
supplemented and as it may at any time hereafter be modified and supplied by
the parties, is made subject to the jurisdiction of any governmental
authority or authorities having jurisdiction in the premises. Nothing
contained in the 1960 Agreement shall be construed as affecting in any way
the right of either party to the 1960 Agreement to unilaterally make
application to the Federal Power Commission for a change in rates, charges,
classification or service, or any rule, regulation or contract relating
thereto, under Section 205 of the Federal Power Act and pursuant to the
Commission's Rules and Regulations promulgated thereunder.

     Section 6.  This Modification No. 8 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 7.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 8.  This Modification No. 8 shall inure to the benefit of, and
be binding upon, the successors and assigns of the respective parties hereto.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By /s/ Zane G. Todd
                       Zane G. Todd, Chairman of
                       the Board and President

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By /s/ G.V. Patterson
                       G.V. Patterson, Vice President

                           March 1, 1977

Indianapolis Power & Light Company
25 Monument Circle
P.O. Box 1595B
Indianapolis, Indiana  46206

Gentlemen:

     This letter is confirmation of the understandings which have been
reached upon a review of the Emergency Service Schedule between our
companies.

     Subsection 3.1 of Service Schedule B of the Interconnection Agreement
between our companies, dated December 30, 1960 as heretofore modified (1960
Agreement), is hereby modified by the deletion therefrom of the dollar
quantity "seventeen and one-half (17.5) mills" and the substitution therefor
of the dollar quantity "three ($.03) cents".

     This modification shall be effective on and after March 1, 1977 and
until the earlier of either the expiration of the term of the 1960
Agreement, or until further amended or modified under the terms of the 1960
Agreement.

     If the foregoing correctly states our understanding please so indicate
by signing and returning the enclosed copy of this letter.

                    Very truly yours,

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ G.V. Patterson
                      Vice President

INDIANAPOLIS POWER & LIGHT COMPANY

By /s/ Zane G. Todd

                        Modification No. 10

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                    Dated as of March 15, 1977

     THIS MODIFICATION NO. 10, made and entered into as of the fifteenth
day of February, 1977, between INDIANAPOLIS POWER & LIGHT COMPANY
(Indianapolis Company), an Indiana corporation, and INDIANA & MICHIGAN
ELECTRIC COMPANY (Indiana Company), also an Indiana corporation;

                            WITNESSETH:

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976 and March 1, 1977 (said
Interconnection Agreement, as so modified, being herein called the 1960
Agreement); and

     WHEREAS, the parties desire to further modify the 1960 Interconnection
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.  Effective as of February 15, 1977 Service Schedule E -
Interchange Power in the form attached hereto as Appendix I, shall be
substituted for Service Schedule E in the form heretofore made a part of the
1960 Agreement.

     Section 2.  Except as hereinabove modified and supplemented, all the
terms and conditions of the 1960 Agreement shall remain in full force and
effect.

     Section 3.  This Modification No. 10 shall insure to the benefit of
and be binding upon the successors and assigns of the respective parties.

     IN WITNESS WHEREOF, the parties hereto have caused this Modification
No. 10 to be executed by their duly authorized officers as of the day and
year first above written.

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Zane G. Todd
                       Chairman of the Board and President

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ Frank N. Rien
                       Vice President

                            APPENDIX I

                        SERVICE SCHEDULE E

                         INTERCHANGE POWER

         Under Agreement, dated December 30, 1960, between
              Indianapolis Power & Light Company and
                Indiana & Michigan Electric Company

Section 1 - DURATION

     1.1  This Service Schedule, a part of and under the Interconnection
Agreement, dated as of the 30th day of December, 1960 between Indianapolis
Power & Light Company (Indianapolis Company) and Indiana and Michigan
Electric Company (Indiana Company), shall become effective as of March 15,
1977, and shall continue in effect throughout the duration of said
Interconnection Agreement of which it is a part.

Section 2 - SERVICES TO BE RENDERED

     Economy Energy

          2.1  Either party may arrange to purchase from any party of the
     other system electric energy ("Economy Energy") whenever it is
     possible to effect a saving thereby and, in the sole judgment of the
     party requested to supply the same, such energy is available.  Economy
     Energy may also be arranged to be obtained from or delivered to
     systems interconnected with the parties, but not a party to this
     Agreement.  Prior to each delivery of Economy Energy, the amount and
     time of delivery and the charge therefore shall be determined by the
     parties.

     Non-Displacement Energy

          2.2  It is further recognized that from time to time occasions
     will arise when the effecting of transactions as provided under
     subsection 2.1 next above will be impracticable but that at the same
     time one of the parties may have electric energy (herein called
     "Non-Displacement Energy") which it is willing to make available from
     surplus capacity either on its own system or from sources outside its
     own system or both, that can be utilized advantageously for short
     intervals by the other party.  It shall be the responsibility of the
     party desiring Non-Displacement Energy to initiate the receipt and
     delivery of such energy.  The party desiring such receipt of energy
     shall notify the other party of the extent to which it desires to use
     Non-Displacement Energy, and whenever in its sole judgment such other
     party determines that it has Non-Displacement Energy 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 party
     purchasing it shall pay the out-of-pocket cost of the party supplying
     such energy and that the resulting savings to the receiving party
     shall be equally shared by the supplying and receiving parties.

          3.2  When Economy Energy is obtained from or delivered to other
     systems interconnected with the parties, but 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 which are defined as the difference between (1) what
     the out-of-pocket cost of the receiving party or system would have
     been to generate such energy, and (2) the out-of-pocket cost of the
     supplying party or system providing the energy such allocation shall
     be made as provided in subsections 3.21 and 3.22 hereinbelow.

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

               3.22  The supplying party or system shall be paid its
          out-of-pocket costs of providing the energy, plus one-half of
          the gross savings remaining after deducting all (b) and (c)
          payments made under subsection 3.21.  The receiving party or
          system shall be entitled to the other one-half of the gross
          savings remaining after deducting all (b) and (c) payments made
          under subsection 3.21.

     Non-Displacement Energy

          3.3  Non-Displacement Energy delivered hereunder shall be
     settled for either by the return of equivalent energy or, at the
     option of the party that supplied such energy, by payment of the
     out-of-pocket cost - such cost being as of the delivery point or
     points, as provided for in Section 5.01 of said Interconnection
     Agreement, taking into account electrical losses incurred from the
     source or sources of such energy to said delivery point or points - of
     the supplying party in generating or supplying such energy plus ten
     per cent of such cost.  If equivalent energy is returned, it shall be
     returned at times when the load conditions of the party receiving it
     are equivalent to the load conditions of such party at the time the
     energy for which it is returned was delivered or, if such party elects
     to have equivalent energy returned under different conditions, it
     shall be returned in such amounts, to be agreed upon by the Operating
     Committee, as will compensate for the difference in conditions.

                        Modification No. 11

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                    Dated as of January 1, 1979

     THIS MODIFICATION NO. 11, made and entered into as of the first day of
January, 1979, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                            WITNESSETH,

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976 and March 1, 1977 and March
15, 1977 (said Interconnection Agreement, as so modified, being herein
called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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.  Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity of $0.60 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.70 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.15 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.175.

     Section 2.  Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.15 and $0.025 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.175 and $0.029 respectively.

     Section 3.  Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.25 and by the substitution
therefor of the dollar quantity $3.75.

     Section 4.  Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified and
supplemented by the deletion therefrom of the dollar quantity $0.65 wherever
it appears therein and by the substitution therefor of the dollar quantity
$0.75.

     Section 5.  This Modification No. 11 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 6.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 7.  This Modification No. 11 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Carl B. Vance

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ Frank N. Rien

                        Modification No. 13

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                    Dated as of January 1, 1980

     THIS MODIFICATION NO. 13, made and entered into as of the first day of
January, 1980, between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation;

                            WITNESSETH:

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, with modifications
thereto, dated November 14, 1963, August 1, 1967, February 1, 1971,
September 1, 1972, May 1, 1974 and April 1, 1976, March 1, 1977, March 15,
1977, January 1, 1979 and March 1, 1979 (said Interconnection Agreement, as
so modified, being herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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.  Subsection 3.11 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified by the deletion
therefrom of the dollar quantity of $0.70 wherever it appears therein and by
the substitution therefor of the dollar quantity $0.85 and is also hereby
modified by the deletion therefrom of the dollar quantity $0.175 wherever it
appears therein and by the substitution therefor of the dollar quantity
$0.24.

     Section 2.  Subsection 3.12 of Section 3 of Service Schedule F - Short
Term Power of the 1960 Agreement is hereby modified and supplemented by the
deletion therefrom of the dollar quantities $0.175 and $0.029 wherever they
appear therein and by the substitution therefor of the dollar quantities
$0.24 and $0.040 respectively.

     Section 3.  Subsection 3.11 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified by the
deletion therefrom of the dollar quantity $3.75 and by the substitution
therefor of the dollar quantity $4.50.

     Section 4.  Subsection 3.12 of Section 3 of Service Schedule I -
Limited Term Power (Firm) of the 1960 Agreement is hereby modified and
supplemented by the deletion therefrom of the dollar quantity $0.75 wherever
it appears therein and by the substitution therefor of the dollar quantity
$1.00.

     Section 5.  This Modification No. 13 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 6.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 7.  This Modification No. 13 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.

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

                    INDIANAPOLIS POWER & LIGHT COMPANY

                    By  /s/ Zane G. Todd

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ Frank N. Rien

                        Modification No. 14

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                     Dated as of April 5, 1982

     THIS MODIFICATION NO. 14, made and entered into as of the fifth day of
April, 1982 between INDIANAPOLIS POWER & LIGHT COMPANY (Indianapolis
Company), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
(Indiana Company), also an Indiana corporation.

                            WITNESSETH:

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, which Agreement was
modified hereafter (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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 F - Short Term
Power of the 1960 Agreement shall be modified and amended to read as
follows:

"Section 3 -- Compensation

     3.1  When Indianapolis Company is the supplying party and Indiana
Company is the reserving party, the reserving 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 (other than Sunday) by the
     supplying party, one-sixth of said $1.05 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, one-fifth of the weekly rate 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-fifth of the weekly rate per kilowatt of the reduction, plus;

          3.12  For each kilowatt of the reserved Short Term Power that is
     purchased by the supplying party from another system, pre-arranged in
     accordance with Subsection 2.11 of this Schedule, the excess, if any,
     of the amount paid therefor by the supplying party over the charge
     therefor under Subsection 3.11 of this Schedule (or if such amount is
     less than such charge minus the deficiency), plus;

          3.13  110% of the out-of-pocket cost of supplying Short Term
     Energy called for during such periods under Subsection 2.12 of this
     Schedule 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 called for during such periods under
     Subsection 2.12 of this Schedule, 100% of the amount paid therefor by
     the supplying party plus 10% thereof not to exceed 1.6 mills per
     kilowatthour.

     3.2  When Indiana Company is the supplying party and Indianapolis
Company is the reserving party, the reserving party shall pay the supplying
party the following demand rate:

          3.21  Weekly Short Term Power - For any week that Short Term
     Power is reserved the weekly demand rate shall be equal to $1.25 per
     kilowatt reserved for such week.  In the event the amount of Weekly
     Short Term Power taken is reduced upon request of the supplying party,
     the demand charge for each day (other than Sunday) during which such
     reduction is in effect shall be reduced by one-sixth (1/6) of the
     supplying party's weekly demand rate per kilowatt of reduction.

          3.22  Daily Short Term Power - For any day that Short Term Power
     is reserved the daily demand rate shall be equal to the rate of
     one-fifth (1/5) of the supplying party's Weekly Short Term Power
     demand rate.  In the event the amount of Daily Short Term Power taken
     is reduced upon request of the supplying party, the demand charge for
     each day during which such reduction is in effect shall be reduced by
     one-fifth (1/5) of the above Weekly Short Term Power demand rate per
     kilowatt of reduction.

          3.23  Third Party Weekly Short Term Power - Whenever the
     supplying party is in turn reserving power from another interconnected
     system such interconnected system shall be designated "Third Party".
     For any week that Weekly Short Term Power is reserved from a Third
     Party the Third Party Weekly Short Term Power demand rate to
     Indianapolis Company shall be equal to $0.24 per kilowatt reserved per
     week plus the demand charge paid therefor by the supplying party to
     the Third Party.  In the event the amount of Third Party Weekly Short
     Term Power taken is reduced upon the request of the Third Party, the
     demand charge for each day (other than Sunday) during which such
     reduction is in effect shall be reduced by one-sixth (1/6) of the
     Third Party Weekly Short Term Power rate per kilowatt of the reduction.

          3.24  Third Party Daily Short Term Power - For any day that
     Short Term Power is reserved from a Third Party the Third Party Daily
     Short Term Power demand rate to Indianapolis Company shall be equal to
     $0.048 per kilowatt reserved per day plus the demand charge paid
     therefor by the supplying party to the Third Party.

          3.25  When Indiana Company is the supplying party and
     Indianapolis Company is the reserving party, the reserving party shall
     pay the supplying party energy charges at the following rates:

          (a)  for each kilowatthour that is generated by the supplying
          party's system 110% of the out-of-pocket costs (including all
          operating, maintenance, tax, transmission losses and other
          expenses incurred that would not have been incurred if the
          energy had not been supplied) of supplying Short Term Energy
          called for during such period, plus;

          (b)  for each kilowatthour purchased by the supplying party from
          a third party to supply the Short Term Energy called for during
          such period, 100% of the amount of the energy charge paid
          therefor by the supplying party plus 1 mill plus any
          transmission losses, taxes and other expenses incurred that
          would not have been incurred if such purchase had not been
          made."

     Section 2.  This Modification No. 14 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 3.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 4.  This Modification No. 14 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, President

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  /s/ John E. Dolan

                        Modification No. 15

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                INDIANA & MICHIGAN ELECTRIC COMPANY

                            __________

                   Dated as of September 1, 1985

     THIS MODIFICATION NO. 15, made and entered into as of the 1st day of
September, 1985, between INDIANAPOLIS POWER & LIGHT COMPANY ("Indianapolis
Company"), an Indiana corporation, and INDIANA & MICHIGAN ELECTRIC COMPANY
("Indiana Company"), also an Indiana corporation;

                            WITNESSETH:

     WHEREAS, Indianapolis Company and Indiana Company entered into an
Interconnection Agreement, dated December 30, 1960, which Agreement was
modified thereafter (said Interconnection Agreement, as so modified, being
herein called the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 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 B - Emergency
Service of the 1960 Agreement shall be modified and amended to read as
follows:

     "Section 3 -- COMPENSATION

          3.1  Emergency Energy delivered under Section 2 above that is
     generated by the supplying party's system shall be settled for, at the
     option of the supplying party, either by the return of equivalent
     energy upon request of such party or by payment of the greater of (a)
     110% of the out-of-pocket cost of supplying such energy, and (b) 30.0
     mills per kilowatthour thereof;

          3.2  Emergency Energy delivered under Section 2 above that is
     purchased by the supplying party from another system at the request of
     the receiving party shall be settled for as follows:

               3.21  When Indiana Company is the supplying party, a
               demand charge of 2.75 mills per kilowatthour of such
               purchased energy and an energy charge of 100% of the
               amount paid therefor by the supplying party plus one mill
               per kilowatthour of such purchased energy plus any
               transmission losses and taxes incurred.

               3.22  When Indianapolis Company is the supplying party,
               the greater of (a) 100% of the amount paid for such energy
               plus, 1.6 mills per kilowatthour, and (b) 30 mills per
               kilowatthour."

     Section 2.  Subsection 3.21 of Section 3 - COMPENSATION of Service
Schedule E - Interchange Power of the 1960 Agreement is hereby modified and
amended by deleting the phrase "plus (c) fifteen per cent of the gross
savings remaining after deducting all such payments for transmission
losses," wherever it appears therein and substituting therefor the
following:

     "plus (c) the following:

               3.211  When Indiana Company is the supplying party:  The
               greater of (i) fifteen percent of the gross savings
               remaining after deducting all such payments for
               transmission losses or (ii) 3.75 mills per kilowatthour of
               energy received for transmission plus revenue taxes
               incurred that would not otherwise have been incurred;

               3.212  When Indianapolis Company is the supplying party:
               Fifteen percent of the gross savings remaining after
               deducting all such payments for transmission losses."

     Section 3.  Subsection 3.3 of Section 3 - COMPENSATION of Service
Schedule E - Interchange Power of the 1960 Agreement is hereby modified and
amended by deleting the words "delivered hereunder" wherever they appear
therein and substituting therefor the phase "delivered under Subsection 2.2
above that is generated by the supplying party's system".

     Section 4.  Section 3 - COMPENSATION of Service Schedule E -
Interchange Power of the 1960 Agreement is hereby modified and amended by
adding a new Subsection 3.4 to read as follows:

          "3.4  Non-Displacement Energy delivered under Subsection 2.2
     above that is purchased by the supplying party's system from another
     interconnected system at the request of the receiving party shall be
     settled for as follows:

               3.41  When Indiana Company is the supplying party; by a
               demand charge of 2.75 mills per kilowatthour of such
               purchased energy and an energy charge of 100% of the
               amount paid therefor by the supplying party, plus one mill
               per kilowatthour of such purchased energy, plus any
               transmission losses and revenue taxes incurred that would
               not otherwise have been incurred.

               3.42  When Indianapolis Company is the supplying party,
               100% of the amount paid for such energy plus 10% of that
               amount, not exceeding, however, 1.6 mills per kilowatthour."

     Section 5.  Section 3 - Compensation of Service Schedule F - Short
Term Power of the 1960 Agreement shall be modified and amended to read as
follows:

     "Section 3 - Compensation

          3.1  When Indianapolis Company is the supplying party and
     Indiana Company is the reserving party, the reserving party shall pay
     the supplying party:

               3.11  For any week that Short Term Power is reserved, a
               rate not to exceed $1.05 per kilowatt reserved; less, for
               each day during any part of which the amount of such Short
               Term Power is reduced (other than Sunday) 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-fifth the weekly rate per kilowatt reserved
               per day (not to exceed $0.21 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-fifth of the weekly rate per kilowatt of the
               reduction (not to exceed $0.21 per kilowatt reserved per
               day); plus or minus,

               3.12  For each kilowatt of Short Term Power prearranged in
               accordance with Subsection 2.11 above, that is purchased
               by the supplying party from another system, the
               difference, if any, between the amount paid therefor and
               the amount charged by the supplying party under Subsection
               3.11 above; plus,

               3.13  For Short Term Energy called for under Subsection
               2.12 above that is furnished from the supplying party's
               system, 110% of the out-of-pocket cost of supplying such
               energy; plus, for Short Term Energy furnished by the
               supplying party from another system, 100% of the amount
               paid therefor plus 10% of such amount or 1.6 mills per
               kilowatthour, whichever is less.

          3.2  When Indiana Company is the supplying party and
     Indianapolis Company is the reserving party, the reserving party shall
     pay the supplying party the following demand rate:

               3.21  Weekly Short Term Power - For any week that Short
               Term Power is reserved, the weekly demand rate of up to
               $1.25 per kilowatt.  If the amount of Weekly Short Term
               Power taken is reduced upon request of the supplying
               party, the demand charge for each day (other than Sunday)
               such reduction is in effect shall be reduced by one-sixty
               (1/6) of the supplying party's weekly demand rate per
               kilowatt of reduction.

               3.22  Daily Short Term Power - For any day that Short Term
               Power is reserved, the daily demand rate shall be equal to
               the rate of one-fifth (1/5) of the supplying party's
               Weekly Short Term Power demand rate.  If the amount of
               Daily Short Term Power taken is reduced upon request of
               the supplying party, the demand charge for each day such
               reduction is in effect shall be reduced by one-fifty (1/5)
               of the above Weekly Short Term Power demand rate per
               kilowatt of reduction.

               3.23  Third Party Weekly Short Term Power - For any week
               that Weekly Short Term Power is reserved by the supplying
               party from another system (hereinafter called a "Third
               Party"), the Third Party Weekly Short Term Power demand
               rate to Indianapolis Company shall be equal to $0.46 per
               kilowatt reserved per week plus the demand charge paid
               therefor by the supplying party to the Third Party.  In
               the event the amount of Third Party Weekly Short Term
               Power taken is reduced upon the request of the Third
               Party, the demand charge for each day (other than Sunday)
               such reduction is in effect shall be reduced by one-sixth
               (1/6) of the Third Party Weekly Short Term Power rate per
               kilowatt of the reduction.

               3.24  Third Party Daily Short Term Power - For any day
               that Short Term Power is reserved from a Third Party, the
               Third Party Daily Short Term Power demand rate to
               Indianapolis Company shall be equal to $0.092 per kilowatt
               reserved per day, plus the demand charge paid therefor by
               the supplying party to the Third Party.

          3.3  When Indiana Company is the supplying party and
     Indianapolis Company is the reserving party, the reserving party shall
     pay the supplying party energy charges at the following rates:

               3.31  For each kilowatthour that is generated by the
               supplying party's system, up to 110% of the out-of-pocket
               costs of supplying Short Term Energy called for under
               Subsection 2.12 above (including all operating,
               maintenance, tax, transmission losses and other expenses
               incurred that would not have been incurred if the energy
               had not been supplied); plus,

               3.32  For each such kilowatthour purchased by the
               supplying party from a Third Party, 100% of the amount of
               the energy charge paid therefor by the supplying party
               plus 1 mill plus any transmission losses, taxes and other
               expenses incurred that would not have been incurred if
               such purchase had not been made.

          3.4  Notwithstanding the rates stated in subsections 3.21 and
     3.31 above; when Indiana company is the supplying party, the sum of
     the above demand charges and the above energy charges for each
     specific reservation made pursuant to Section 2 above of Service
     Schedule F shall not be less than 110% of the total out-of-pocket cost
     of supplying the Short Term Energy for such reservation."

     Section 6.  Section 3 - Compensation of Service Schedule I - Limited
Term Power (Firm) shall be modified and amended to read as follows:

     "Section 3 - Compensation

          3.1  When Indianapolis Company is the supplying party and
     Indiana Company is the reserving party, the reserving party shall pay
     the supplying party:

               3.11 For any month that Limited Term Power (Firm) is
               reserved in accordance with Section 2 above, a rate not to
               exceed $5.50 per kilowatt so reserved; plus or minus,

               3.12  For each kilowatt of Limited Term Power (Firm)
               prearranged in accordance with Subsection 2.11 above, that
               is furnished by the supplying party from another system,
               the difference, if any, between the amount paid therefor
               and the amount charged by the supplying party under
               Subsection 3.11 above; plus,

               3.13  For Limited Term Energy (Firm) called for under
               Subsection 2.12 above that is furnished from the supplying
               party's system, 110% of the out-of-pocket cost of
               supplying such energy; plus, for Limited Term Energy
               (Firm) furnished by the supplying party from another
               system, 100% of the amount paid therefor plus 10% of such
               amount or 1.6 mills per kilowatthour, whichever is less.

          3.2  When Indiana Company is the supplying party and
     Indianapolis Company is the reserving party, the reserving party shall
     pay the supplying party:

               3.21  For any month such Limited Term Power (Firm) is
               reserved in accordance with Section 2 above, a rate of up
               to $6.50 per kilowatt so reserved; plus

               3.22  110% of the out-of-pocket cost (including all
               operating, maintenance, tax, transmission losses and other
               expenses incurred that would not have been incurred if the
               energy had not been supplied) of supplying Limited Term
               Energy (Firm) called for during such period that is
               generated by the supplying party's system; plus

               3.23  For each kilowatt of the reserved Limited Term Power
               (Firm) that is purchased by the supplying party from a
               Third Party, the excess, if any, of the amount paid
               therefor by the supplying party over the charge therefor
               under subsection 2.11 of this Service Schedule (or, if
               such amount is less than such charge, minus the
               deficiency); plus

               3.24  For each month such Limited Term Power (Firm) is
               reserved, $2.00 per kilowatt, plus 1 mill per kilowatt-
               hour."

     Section 7.  This Modification No. 15 shall be effective from the date
first above written to the expiration date of the 1960 Agreement.

     Section 8.  Except as hereinabove modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     Section 9.  This Modification No. 15 shall inure to the benefit of and
be binding upon the respective successors and assigns of the 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
                       and Chief Operating Officer

                    INDIANA & MICHIGAN ELECTRIC COMPANY

                    By  signature illegible

                        Modification No. 16

                                to

                     INTERCONNECTION AGREEMENT

                      Dated December 30, 1960

                            as amended,

                              between

                INDIANAPOLIS POWER & LIGHT COMPANY

                                and

                  INDIANA MICHIGAN POWER COMPANY

          (Formerly Indiana & Michigan Electric Company)
                            __________

                   Dated as of September 4, 1991

     THIS MODIFICATION NO. 16, made and entered into as of the fourth day
of September, 1991, between INDIANAPOLIS POWER & LIGHT COMPANY ("IPL"), an
Indiana corporation, and INDIANA MICHIGAN POWER COMPANY ("I&M"), also an
Indiana corporation;

                            WITNESSETH,

     WHEREAS, IPL and I&M entered into an Interconnection Agreement, dated
December 30, 1960, with 15 modifications and 4 unilateral rate filings
thereto (said Interconnection Agreement, as so modified, being herein called
the 1960 Agreement); and

     WHEREAS, the parties desire to further modify the 1960 Agreement, as
hereinafter set forth;

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

     SECTION 1.  It is hereby agreed that a new Service Schedule L --
Peaking Power and Energy and Seasonal Exchange and Energy be made a part of
the 1960 Agreement in the form attached hereto as Appendix I.

     SECTION 2.  It is hereby further agreed that Section 3.03 of Article 3
of the 1960 Agreement be modified to read:

          "3.03  The following service schedules are agreed to and hereby
     made a part of this agreement:

          Service Schedule A--Firm Power to Indianapolis
          Service Schedule B--Emergency Service
          Service Schedule C--Coordination of Scheduled Maintenance of
                                Generating Facilities
          Service Schedule D--Energy Transfer
          Service Schedule E--Interchange Power
          Service Schedule F--Short Term Power
          Service Schedule I--Limited Term Power (Firm)
          Service Schedule K--Conservation Energy
          Service Schedule L--Peaking Power and Energy and Seasonal
                    Exchange Power and Energy"

     SECTION 3.  Except as hereinbefore modified and amended, all the terms
and conditions of the 1960 Agreement shall remain in full force and effect.

     SECTION 4.  This Modification No. 16 shall inure to the benefit of,
and be binding upon, the successors and assigns of the respective parties
hereto.

     IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their respective duly authorized officers.

                    INDIANAPOLIS POWER & LIGHT COMPANY

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

ATTEST:

/s/ Clark L. Snyder
Clark L. Snyder
Assistant Secretary

                    INDIANA MICHIGAN POWER COMPANY

                    By /s/ illegible
                      Vice Chairman of the Board and
                       Chief Executive Officer

ATTEST:

/s/ John D. Loujo, Jr.
Secretary

                        SERVICE SCHEDULE L
                     PEAKING POWER AND ENERGY
              AND SEASONAL EXCHANGE POWER AND ENERGY

              Under Agreement dated December 30, 1960

                              between

                Indianapolis Power & Light Company

                                and

                  Indiana Michigan Power Company

          (Formerly Indiana & Michigan Electric Company)

SECTION 1 - DURATION

1.1  This Service Schedule, a part of and under the above referenced
agreement between Indianapolis Power & Light Company ("IPL") and Indiana
Michigan Power Company ("I&M"), shall become effective on April 1, 1992, and
shall continue in effect through March 31, 1997 or thereafter as provided in
Section 2.6 and/or Section 2.7(a) below ("Contract Period").

SECTION 2 - SERVICES TO BE RENDERED

2.1  Throughout the Contract Period and subject to the terms of this
Service Schedule L:

     a)   I&M shall, upon call, make arrangements for and shall stand
          ready to deliver power ("Peaking Power") and associated energy
          ("Peaking Energy"), and IPL shall stand ready to receive and
          shall pay for such Peaking Power and Energy in accordance with
          the rates specified in Section 3 below, and
     b)   both Parties shall, upon call, stand ready to deliver power
          ("Seasonal Energy Power") and associated energy ("Seasonal
          Exchange Energy"), and both Parties shall stand ready to receive
          such power and energy in the manner described in Section 2.7
          below, and to pay for Seasonal Exchange Energy in accordance
          with the rates specified in Section 3 below.

2.2  The Peaking Power delivered hereunder, in any hour, shall not exceed
the megawatthours ("MWH") per hour during the periods specified below:

     a)   100 MWH per hour from April 1, 1992 - March 31, 1993;
     b)   200 MWH per hour from April 1, 1993 - March 31, 1997;
     c)   200 MWH per hour from April 1, 1997 - December 31, 1997, if IPL
          chooses to continue service under Service Schedule L pursuant to
          subsection 2.67 below; and
     d)   200 MWH per hour from January 1, 1998 - November 30, 1999, if
          IPL chooses to continue service under Service Schedule L
          pursuant to subsection 2.6 below.

2.3  The Peaking Energy delivered hereunder, shall not exceed the amount of
MWH during the periods as specified below:

     a)   66,000 MWH during April 1, 1992 - December 31, 1992;
     b)   87,600 MWH during April 1, 1993 - December 31, 1993, plus 66,000
          MWH during April 1, 1993 - December 31, 1993;
          175,200 MWH during January 1, 1994 - December 31, 1994;
          175,200 MWH during January 1, 1995 - December 31, 1995;
          175,700 MWH during January 1, 1996 - December 31, 1996;
          43,200 MWH during January 1, 1997 - March 31, 1997;
     c)   or 175,200 MWH during January 1, 1997 - December 31, 1997 if IPL
          chooses to continue service under Service Schedule L pursuant to
          subsection 2.6 below; and
     d)   175,200 MWH during January 1, 1998 - December 31, 1998,
          160,300 MWH during January 1, 1999 - November 30, 1999,
          if IPL chooses to continue service under Service Schedule L
          pursuant to subsection 2.6 below.

2.4  IPL shall inform I&M by 2 p.m. Eastern Standard Time each day of its
expected hourly schedule for Peaking Energy in whole megawatthours per hour
for the next day.  IPL shall schedule Peaking Power and Energy in
incremental blocks of 100 MWH per hour.  Thereafter, IPL may, due to
unforeseen circumstances, make changes to this schedule by giving reasonable
notice thereof.

2.5  The availability of Peaking Power and Energy, and I&M's obligation to
deliver same to IPL in any hour, is contingent upon the ability of the
American Electric Power ("AEP") System to first meet its internal load and
its firm load commitments as of the effective date of this Service Schedule
L, plus any base load capacity sales up to 1500 MW.  The present AEP System
firm load commitments are:  31 MW (not to exceed 75 MW over the term of this
Agreement) for Richmond Power and Light Company; 50 MW for Wabash Valley
Power Association, Inc., through December 31, 1997; 500 MW for Virginia
Power Company, through December 31, 1999, subject to Rockport Unit 1
availability; 250 MW for Carolina Power & Light Company, subject to Rockport
Unit 2 availability, through December 31, 2009; 100 MW for American
Municipal Power-Ohio, Inc. through December 31, 1997 with options to extend
through November 30, 2001; and the Backup Power requirements of Buckeye
Power, as described in the Station Agreement between the Ohio Power company,
Buckeye Power, Inc. and Cardinal Operating Company, dated January 1, 1968.
If, after satisfying its internal and firm load commitments, the AEP
System's resources are not sufficient for I&M to meet its obligation to
delivery Peaking Power and Energy to IPL, I&M shall arrange for the purchase
of hourly or daily power from non-AEP sources, to the extent such power is
available, deliverable, and required, in order to deliver Peaking Power and
Energy scheduled by IPL pursuant to this Service Schedule L.

2.6  By March 31, 1995, IPL will provide written notice to I&M with respect
to IPL's desire to extend the Contract Period and continue service under
Service Schedule L through December 31, 1997.  If the Contract Period has
been extended through December 31, 1997, then by January 1, 1996, IPL will
provide written notice to I&M, with respect to IPL's desire to further
extend the Contract Period and continue service under Service Schedule L
through November 30, 1999.

2.7  a)   By December 31, 1993, IPL will provide written notice to I&M,
          with respect to IPL's desire to exchange Seasonal Exchange Power
          and Energy during a portion of the Contract Period, from June,
          1995 through February, 1999.

     b)   The maximum rate of delivery of Seasonal Exchange Power and
          Energy supplied hereunder, in any hour, shall not exceed 50 MWH
          per hour.

     c)   A purchasing Party shall inform the supplying Party by 2 p.m.
          Eastern Standard Time each day of its expected hourly schedule
          for Seasonal Exchange Power and Energy in whole megawatt hours
          per hour for the next day.  Thereafter, the purchasing party
          may, due to unforeseen circumstances, make changes to this
          schedule by giving reasonable notice.

     d)   The availability of Seasonal Exchange Power and Energy and a
          supplying Party's obligation to deliver same to the purchasing
          Party in any hour is contingent upon the ability of the
          supplying Party to first meeting its internal load and its firm
          load commitments as of the effective date of this Service
          Schedule L.  The present firm load commitments of the AEP System
          are as enumerated in Section 2.5 above.

     e)   For the period defined in Section 2.7(a) during which Seasonal
          Exchange Power and Energy is agreed to be exchanged, I&M shall
          supply 50 MWH per hour to IPL during the months of June through
          August in the summer seasons of 1995, 1996, and 1997 and IPL
          shall supply 50 MWH per hour to I&M during the months of
          December through February in the winter seasons of 1995/1996,
          1996/1997, 1997/1998 and 1998/1999.

     f)   Seasonal Exchange of Power and Energy may be extended from time
          to time after the period defined in Section 2.7(a) in such
          amount and for such periods as may be mutually agreed upon by
          the parties.

2.8  I&M and IPL shall at all times operate and maintain their respective
generation and transmission systems in a manner consistent with safe,
prudent and efficient operating practices that are generally considered by
the electric utility industry as being prudent utility practice.

SECTION 3 - COMPENSATION

3.1  Demand Charges - IPL shall make monthly payments to I&M for Peaking
Power during the term of this Service Schedule L as follows:

     a)   $600,000 from April 1, 1992 through March 31, 1993;

     b)   $1,200,000 from April 1, 1993 through March 31, 1997;

     c)   $1,200,000 from April 1, 1997 through December 31, 1997 if IPL
          chooses to continue service under Service Schedule L pursuant to
          subsection 2.6 above; and

     d)   $1,550,000 from January 1, 1998 through November 30, 1999, if
          IPL chooses to continue service under Service Schedule L
          pursuant to subsection 2.6 above.

3.2  Energy Charges - IPL shall make monthly payments to I&M for Peaking
Energy delivered during the term of this Service Schedule L.  The monthly
charges will equal the out-of-pocket cost of supplying Peaking Energy
delivered during the month, pursuant to subsection 2.4 above, including all
operating, variable maintenance, tax, transmission losses, the cost as
agreed to by the Operating Committee or replacement of consumed SO2 and
other atmospheric emission allowances, if any, when such allowance programs
become effective, and other expenses incurred which would not have been
incurred if the energy had not been supplied.  Energy charges are subject to
review by the Operating Committee.  However, the out-of-pocket cost for any
hour during which AEP generates or purchases power to meet its obligation to
deliver Peaking Power and Energy to IPL shall not exceed the calculated out-
of-pocket cost of operating a gas turbine plant with a Heat Rate of 11,121
/BUT/KWH during the same month.  The calculation of the out-of-pocket cost
of operating a gas turbine plant shall be made as agreed upon by the
Operating Committee.  The gas cost for this maximum rate calculation will be
equal to the cost experienced by IPL the previous month for its own gas
fired peaking capacity or the cost of natural gas for Indiana as listed in
the table "Average Price of Natural Gas Delivered to Electric Utility
Consumers by State" (current Table 31) in the "Energy Information
Administration/Natural Gas Monthly" for the previous month, if IPL shall not
have operated such generating capacity in the month.  IPL shall inform I&M
of such costs in a timely manner.

3.3  Charges for Seasonal Exchange Power.  There shall be no demand Charge
for Seasonal Exchange Power.  IPL shall make monthly payments to I&M during
the summer seasons and I&M shall make monthly payments to IPL during the
winter seasons, pursuant to Section 2.7(e), for Seasonal Exchange Energy
delivered.  The monthly charges will equal the delivering company's out-of-
pocket cost of supplying such Energy as defined in subsection 3.2 above,
plus the lesser of a) 10% of such out-of-pocket cost or b) 3 mills/KWH.

SECTION 4 -- REGULATORY APPROVAL

4.1  If the Federal Energy Regulatory Commission ("FERC") does not accept
this Service Schedule L for filing within ninety (90) days of its
submission, either Party may terminate this Service Schedule.  If the FERC
requires modification to the rates, terms, or conditions of this Service
Schedule L as a condition of accepting it for filing, either Party may
terminate this Service Schedule.  In the event the Indiana Utility
Regulatory Commission ("IURC") does not authorize IPL to sue one of the
purchase power cost recovery mechanisms requested by IPL, or in IPL's first
general retail electric rate proceeding ("Rate Case") following the
effective date of this Service Schedule L, the IURC disallows recovery of
past Demand Charges paid by IPL hereunder and/or disallows future Demand
Charges hereunder which are fixed, known and measurable for such rate
proceeding, then in any such event, IPL may terminate this Service Schedule
L.

4.2  Notice of any termination under this Section 4 shall be given in
writing by either Party to the other Party within thirty (30) days after
final action (final action being limited to relief available solely from
such regulatory authority without the necessity of filing any petition for
rehearing or reconsideration) of the regulatory authority involved which
imposes such modification, as hereinabove described, or which fails to
provide recovery by IPL of the Demand Charges payable by it under this
Service Schedule L.  This Service Schedule L shall automatically terminate
thirty (30) days after the date of such notice.

                        MODIFICATION NO. 17
                              TO THE
                     INTERCONNECTION AGREEMENT
                              BETWEEN
                INDIANAPOLIS POWER & LIGHT COMPANY
                                AND
                  INDIANA MICHIGAN POWER COMPANY

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 Indiana Michigan Power Company ("Buyer")
and IPL dated December 30, 1960, as amended (the "Agreement").

                            WITNESSETH:

WHEREAS, IPL and Indiana Michigan Power Company entered into the Agreement
on December 30, 1960, 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 B                 Emergency Service
          Service Schedule E                 Interchange Power
          Service Schedule F                 Short Term Power
          Service Schedule I                 Limited Term Power
                                                (Firm)
          Service Schedule L                 Peaking Power and
                                             Energy and Seasonal
                                             Exchange Power and
                                             Energy

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 Peaking Power and  Energy and Seasonal
Exchange Power and Energy, 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, then another nationally
     recognized SO2 Allowance trading market price or market price index,
     at the beginning of the month.  The SO2 Allowance value may be changed
     at any time during the month to reflect the more current incremental
     cost, or market price, for SO2 Allowances.  Buyer will be notified of
     the new SO2 Allowance value prior to dispatch of IPL energy to Buyer.

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

ADDENDUM I
                                                  Page 5 of 40

                                ADDENDUM I

                                    to

                         Interconnection Agreement

                                  between

                INDIANA & MICHIGAN ELECTRIC COMPANY (I&ME)

                                    and

                 INDIANAPOLIS POWER & LIGHT COMPANY (IP&L)

                    (I&ME's Rate Schedule FERC No. 21)

SECTION 1.  Subsection 3.3 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the first sentence of such subsection 3.3 and by the
substitution therefor of the following sentence.  "Non-
Displacement Energy delivered under subsection 2.2 above that is
generated by the supplying party's system shall be settled for
either by the return of equivalent energy or, at the option of
the party that supplied such energy, by payment of the out-of-
pocket cost (OPC)--such cost being as of the delivery point or
points, as provided for in Section 5.01 of said Interconnection
Agreement, taking into account electrical losses incurred from
the source or sources of such energy to said delivery point or
points--of the supplying party in generating or supplying such
energy plus ten per cent of such cost when Indianapolis Company
is the generating party and by payment of a demand charge of up
to 25 mills per kilowatthour plus an energy charge of up to 110%
of OPC when Indiana Company is the generating party."

SECTION 2.  Section 3 of Service Schedule E - Interchange Power
of the 1960 Interconnection Agreement between I&ME and IP&L is
hereby amended and supplemented by the addition of the following
new subsection numbered 3.5 at the end of Section 3:

     "3.5  Notwithstanding Indiana Company's rates stated in
     subsection 3.3 above, the sum of the above demand
     charges and the above energy charges for each specific
     reservation made pursuant to subsection 2.2 of this
     Service Schedule shall not be less than 100% of the
     out-of-pocket cost of supplying the Non-Displacement
     Energy for such reservation."

SECTION 3.  Subsection 3.21 of Section 3 of Service Schedule F -
Short Term Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the quantity "$1.25" wherever it appears therein and
by the substitution therefor of the quantity "$2.00".

In WITNESS WHEREOF, Indiana & Michigan Electric Company hereto
has caused this Agreement to be executed by a duly authorized
officer.

                              INDIANA & MICHIGAN ELECTRIC COMPANY

                              By  /s/ signature illegible
                                   Vice President

ADDENDUM II
                                                  Page 3 of 12

                                ADDENDUM II

                                    to

                         Interconnection Agreement

                                  between

                INDIANA & MICHIGAN ELECTRIC COMPANY (I&ME)

                                    and

                 INDIANAPOLIS POWER & LIGHT COMPANY (IP&L)

                    (I&ME's Rate Schedule FERC No. 21)

SECTION 1.  Subsection 3.21 of Section 3 of Service Schedule B -
Emergency Service of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "2.75 mills per kilowatthour of such
purchased energy" wherever they appear therein and by the
substitution therefor of the words "5.75 mills per kilowatt
reserved per hour".

SECTION 2.  Subsection 3.211 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "3.75 mills per kilowatthour of energy
received for transmission" wherever they appear therein and by
the substitution therefor of the words "the sum of a demand
charge of 5.75 mills per kilowatt reserved per hour from a third
party and an energy charge of one mill per kilowatthour of energy
received from the third party."

SECTION 3.  Subsection 3.41 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words "2.75 mills per kilowatthour of such
purchased energy" wherever they appear therein and by the
substitution therefor of the words "5.75 mills per kilowatt
reserved per hour".

In WITNESS WHEREOF, Indiana & Michigan Electric Company hereto
has caused this Agreement to be executed by a duly authorized
officer.

                         INDIANA & MICHIGAN ELECTRIC COMPANY

                         By  /s/ signature illegible
                              Vice President

                                        COMPLIANCE FILING

The Interconnection Agreement dated December 30, 1960 between
Indiana & Michigan Electric Company (I&ME) and Indianapolis Power
& Light Company (IP&L), I&ME's rate schedule FERC No. 21 is
hereby amended in accordance with Order Accepting Proposed Rates
for Filing, Noting Intervention, Granting Waiver of Notice
Requirements in Part, and Terminating Dockets, of the Federal
Energy Regulatory Commission, in Dockets Nos. ER87-280-000, ER87-
281-000, and ER87-355-000, issued June 16, 1987.

SECTION 1.  Subsection 3.21 of Section 3 of Service Schedule B -
Emergency Service of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour and" and by the substitution therefor
of the following words "a demand charge of 5.75 mills per
kilowatt reserved per hour but the total demand charge in any one
day shall be no more than the product of $0.092 times the highest
amount in kilowatts reserved in any hour during the day and".

SECTION 2.  Subsection 3.211 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour from a third party and" and by the
substitution therefor of the words, "a demand charge of 5.75
mills per kilowatt reserved per hour but the total demand charge
in any one day shall be no more than the product of $0.092 times
the highest amount in kilowatts reserved in any hour during the
day and".

SECTION 3.  Subsection 3.3 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of up to 25 mills per
kilowatthour plus" and by the substitution therefor of the
following words, "a demand charge of up to 25 mills per
kilowatthour but the total demand charge in any one day shall be
no more than the product of $0.40 times the highest amount in
kilowatts reserved in any hour during the day plus".

SECTION 4.  Subsection 3.41 of Section 3 of Service Schedule E -
Interchange Power of the 1960 Interconnection Agreement between
I&ME and IP&L is hereby amended and supplemented by the deletion
therefrom of the words, "a demand charge of 5.75 mills per
kilowatt reserved per hour and" and by the substitution therefor
of the following words" a demand charge of 5.75 mills per
kilowatt reserved per hour from a third party, but the total
demand charge in any one day shall be no more than the product of
$0.092 times the highest amount in kilowatts reserved in any hour
during the day and".

ADDENDUM III
                                                  Page 5 of 42

                               ADDENDUM III

                           Dated:  July 1, 1988

                                    to

                         Interconnection Agreement

                         Dated:  December 30, 1960

                                  between

                    Indianapolis Power & Light Company

                                    and

                      Indiana Michigan Power Company

SECTION 1.  Subsection 2.1 of Section 2 of Service Schedule B -
Emergency Service of this 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended and
supplemented by the deletion therefrom of the sentence "Either
party may, upon request, deliver energy hereunder in the event of
an emergency jeopardizing the ability of a system interconnected
with the system of the requesting party to meet its native load
and other firm commitments."

SECTION 2.  Section 3 of Service Schedule B - Emergency Service
of this 1960 Interconnection Agreement between Indiana Company
and Indianapolis Company is deleted and replaced by the following
new Section 3:

"Section 3 - COMPENSATION

3.1  The supplying party shall pay the receiving party:

     3.11  When Indiana Company is the supplying party, electric
energy delivered under Section 2 above shall be settled for by
the payment of the greater of (a) 110% of the out-of-pocket cost
(including all operating, maintenance, tax, the cost of
transmission losses and other expenses incurred that would not
have been incurred if the energy had not been supplied) of
supplying such energy or (b) 10 cents per kilowatthour thereof.

     3.12  When Indianapolis Company is the supplying party,
Emergency Energy delivered under Section 2 above that is
generated by the supplying party's system shall be settled for,
at the option of the supplying party, either by the return of
equivalent energy upon request of such party or by payment of the
greater of (a) 110% of the out-of-pocket cost of supplying such
energy and (b) 30.0 mills per kilowatthour thereof;

3.2  Emergency Energy delivered under Section 2 above that is
purchased by the supplying party from another system at the
request of the receiving party shall be settled for as follows:

     3.21  When Indianapolis Company is the supplying party, the
greater of (a) 100% of the amount paid for such energy plus, 1.6
mills per kilowatthour, and (b) 30 mills per kilowatthour."

SECTION 3.  Subsection 3.23 of Section 3 of Service Schedule F -
Short Term Power of this 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended and
supplemented by the deletion of the last sentence of subsection
3.23 and by the addition of the following sentence:

"In the event the amount of Weekly Third Party Short Term Power
taken by Indianapolis Company is reduced by Indiana Company
because of a transmission burden on its system, the rate in
subsection 3.23 shall be reduced by a) $0.0766 per kilowatt of
the reduction for each day (other than Sunday) during which such
reduction is in effect, plus (b) the reduction, if any, in the
demand charge paid by Indiana Company to the Third Party."

Indiana Michigan Power Company

By  /s/ signature illegible

ADDENDUM IV
Page 10 of 65

                                ADDENDUM IV

                                    to

                         Interconnection Agreement

                         Dated:  December 30, 1960

                                  between

                    Indianapolis Power & Light Company

                                    and

                      Indiana Michigan Power Company

                       Amended as of August 21, 1989

     SECTION 1.  Subsection 3.21 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the words
"up to $2.00" and by the substitution therefor of the words "up
to $3.70".

     SECTION 2.  Subsection 3.22 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.22

"3.22  Daily Short Term Power - For any day that Short Term Power
is reserved, at the rate of up to $.74 per kilowatt reserved per
such day.  In the event the amount of Daily Short Term Power
taken is reduced upon request of the supplying party, the demand
charge shall be reduced to zero per kilowatt of reduction for
each day during which such reduction is made."

     SECTION 3.  Subsection 3.4 of Section 3 of Service Schedule
F - Short Term Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.4.

"3.4  When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to Section 2 of this Service Schedule shall not exceed
the total of:

(1)  the product of the number of kilowatts reserved for such
reservation times the maximum weekly and Daily demand charges
specified above in subsections 3.21 and 3.22 as appropriate, and
(2) the product of the number of kilowatthours supplied for such
reservation times 110% of the average cost per kilowatthour of
energy generated by Indiana Company's Rockport Unit No. 1 for the
second next preceding month; but however in no case shall such
total be less than 110% of the out-of-pocket cost of supplying
the Short Term Energy for such reservation."

     SECTION 4.  Subsection 3.21 of Section 3 of Service Schedule
I - Limited Term Power (Firm) of the 1960 Interconnection
Agreement between Indiana Company and Indianapolis Company is
hereby amended and supplemented by the deletion therefrom of the
words "up to $6.50" and by the substitution therefor of the words
up to $18.75".

     SECTION 5.  Subsection 3.22 of Section 3 of Service Schedule
I - Limited Term Power (Firm) of the 1960 Interconnection
Agreement between Indiana Company and Indianapolis Company is
hereby amended and supplemented by the deletion therefrom of the
words "110% of the" and by the substitution therefor of the words
"up to 110% of the".

     SECTION 6.  Section 3 of Service Schedule I - Limited Term
Power (Firm) of the 1960 Interconnection Agreement between
Indiana Company and Indianapolis Company is hereby amended by the
addition of the following new subsection 3.25.

"3.25  When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to Section 2 of this Service Schedule shall not exceed
the total of:

(1)  the product of the number of kilowatts reserved for such
reservation times the maximum monthly demand charge specified
above in subsection 3.21, and (2) the produce of the number of
kilowatthours supplied for such reservation times 110% of the
average cost per kilowatthour of energy generated by Indiana
Company's Rockport Unit No. 1 for the second next preceding
month; but however in no case shall such total be less than 110%
of the out-of-pocket cost of supplying the Limited Term Energy
for such reservation."

     SECTION 7.  Subsection 3.3 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the words
"25 mills" and by the substitution therefor of the words "46
mills".

     SECTION 8.  Subsection 3.3 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
amended and supplemented by the deletion therefrom of the
quantity "$0.40" and by the substitution therefor of the quantity
"$0.74".

     SECTION 9.  Subsection 3.5 of Section 3 of Service Schedule
E - Interchange Power of the 1960 Interconnection Agreement
between Indiana Company and Indianapolis Company is hereby
replaced with the following subsection 3.5.

"3.5  When Indiana Company is the supplying party the sum of the
demand and energy charges for each specific reservation made
pursuant to subsection 2.2 of this Service Schedule shall not
exceed the total of:

(1)  the product of the number of kilowatts reserved for such
reservation times the maximum hourly demand charge specified
above in subsection 3.3, and (2) the product of the number of
kilowatthours supplied for such reservation times 110% of the
average cost per kilowatthour of energy generated by Indiana
Company's Rockport Unit No. 1 of the second next preceding month;
but however in no case shall such total be less than 100% of the
out-of-pocket cost of supplying the energy for such reservation."

ADDENDUM V

TO THE

INTERCONNECTION AGREEMENT

AMONG

INDIANAPOLIS POWER & LIGHT COMPANY

AND

INDIANA MICHIGAN POWER COMPANY
(formerly INDIANA & MICHIGAN ELECTRIC COMPANY)

Effective as of

ADDENDUM V
TO THE
INTERCONNECTION AGREEMENT
BETWEEN
INDIANAPOLIS POWER & LIGHT COMPANY
AND
INDIANA MICHIGAN POWER COMPANY
(formerly INDIANA & MICHIGAN ELECTRIC COMPANY)

     Pursuant to Order No. 888, Indianapolis Power &
Light Company (IPL) restates the rates for service
provided by IPL under the Interconnection Agreement as
the following:

1)   The Interconnection Agreement provides for IPL sales
of capacity and energy under service schedules described
as:

Service Schedule B - Emergency Service
Service Schedule E - Interchange Power
Service Schedule F - Short Term Power
Service Schedule I - Limited Term Power (Firm)

2)   The wholesale generation component of the rate
applicable to service under these Service Schedules shall
be the bundled rate minus the transmission and ancillary
service rates provided in Section 3 of this Addendum.

Where the Service Schedules provide for compensation to
IPL in the form of equivalent energy, such return of
equivalent energy shall be made of the generation
component, with the transmission and ancillary services
related to such return of equivalent energy arranged
pursuant to and assessed as provided in Section 3 of this
Addendum.

3) Transmission and ancillary services necessary to
effectuate sales under the Interconnection Agreement
shall be arranged by IPL under and subject to the rates,
terms, and conditions of IPL's Open Access Transmission
Tariff.  The rates for point-to-point transmission
service and the two ancillary services necessary to
effectuate sales under the Interconnection Agreement are
provided below.  IPL will provide either Short-Term Firm
Point-to-Point or Non-Firm Point-to-Point transmission
service, and ancillary services for Scheduling, System
Control and Dispatch Service (Scheduling Service) and
Reactive Supply and Voltage Control from Generation
Sources Service (Reactive Supply Service).  IPL will not
provide Regulation and Frequency Response Service, Energy
Imbalance Service, Operating Reserve-Spinning Reserve
Service, or Operating Reserve-Supplemental Reserve
Service in connection with the sales under the
Interconnection Agreement, and there will be no charge
for such services in connection with the sales under the
Interconnection Agreement.

The rates for both Short-Term Firm and Non-Firm Point-to-
Point Service are:  $ 930.00/MW of reserved capacity for
monthly service, $215.00/MW of reserved capacity for
weekly service, $43.00/MW of reserved capacity for on-
peak daily service, and $30.70/MW of reserved capacity
for off-peak daily service, with the daily service
capacity charges capped at the weekly rates.  Non-Firm
Point-to-Point service is available on an hourly basis at
$2.69/MW for on-peak hours and $1.28/MWH for off-peak
hours with the maximum hourly charges capped at the daily
rates.

For Scheduling Service, the monthly rate is $10.00/MW of
reservation, the weekly rate is $3.00/MW, the daily rate
is $0.60/MW, and the hourly rate is $0.04/MWH.  The sum
of the hourly charges is capped at the daily rate, the
sum of the daily charges is capped at the weekly rate,
and the sum of the weekly charges is capped at the
monthly rate.

For Reactive Supply Service, the monthly rate is
$110.00/MW of reservation, the weekly rate is $25.00/MW,
the daily rate is $5.00/MW, and the hourly rate is
$0.31/MWH.  The sum of the hourly charges is capped at
the daily rate, the sum of the daily charges is capped at
the weekly rate, and the sum of the weekly charges is
capped at the monthly rate.

If transmission and ancillary services are obtained by
Indiana Michigan Power Company under Indianapolis Power &
Light Company's Open Access Transmission Tariff, there
will be no charge related to transmission and ancillary
service assessed under the Interconnection Agreement.  A
service agreement under Indianapolis Power & Light
Company's Open Access Transmission Tariff is on file as
of the effective date of this Addendum V to govern
service to Indiana Michigan Power Company for this power
sale, and charges for transmission and ancillary services
for this power sale will be assessed to Indiana Michigan
Power Company under the Open Access Transmission Tariff.Exhibit 10.2

                      THIRD AMENDMENT

                           to the

                 INTERCONNECTION AGREEMENT

                    ,dated May 1, 1992,

                           among

             INDIANAPOLIS POWER & LIGHT COMPANY

                            and

                      PSI ENERGY, INC.

                            and

                   CINERGY SERVICES, INC.

                    Dated June 30, 1995

             INDIANAPOLIS POWER & LIGHT COMPANY
            FEDERAL ENERGY REGULATORY COMMISSION
                 Rate Schedule FERC No. 23

                     CINERGY COMPANIES
            FEDERAL ENERGY REGULATORY COMMISSION
                 Rate Schedule FERC No. 10

INDEX

SECTION ONE:   Agreement As Amended

               Interconnection Agreement Between
               Indianapolis Power & Light Company, and
               The Cincinnati Gas & Electric Company,
               PSI Energy, Inc., and CINergy Services, Inc.,
               dated June 30, 1995

SECTION TWO:   Agreement As Signed

               Interconnection Agreement Between
               Indianapolis Power & Light Company, and
               The Cincinnati Gas & Electric Company,
               PSI Energy, Inc., and CINergy Services, Inc.,
               dated June 30, 1995

                      THIRD AMENDMENT
                           TO THE

                 INTERCONNECTION AGREEMENT

                           AMONG

             INDIANAPOLIS POWER & LIGHT COMPANY

                            and

                      PSI ENERGY, INC.
                 AND CINERGY SERVICES, INC.

     0.01 THIS THIRD AMENDMENT, dated on the 30th day of June
1995,  among  INDIANAPOLIS POWER & LIGHT COMPANY (hereinafter
referred  to as "IPL"), a corporation organized and  existing
under  the laws of the State of Indiana and PSI ENERGY,  INC.
(hereinafter  referred to as "PSI"), a corporation  organized
and  existing  under the laws of the State  of  Indiana,  and
CINERGY  SERVICES, INC. (hereinafter referred to as  "CINergy
Services"),  a corporation organized and existing  under  the
laws of the State of Delaware.  IPL, PSI and CINergy Services
are sometimes hereinafter referred to individually as "Party"
and collectively as "Parties" where appropriate.
                    W I T N E S S E T H:

     0.02  WHEREAS, There is now in force and effect  between
IPL and PSI an Interconnection Agreement, dated as of May  1,
1992,   (said  Interconnection  Agreement  being  the   Ninth
Supplement to the 1962 Interconnection Agreement between  IPL
and PSI, herein called the "1992 Agreement"); and

     0.03  WHEREAS,  The  Cincinnati Gas &  Electric  Company
("CG&E")  and  PSI  merged on October 24,  1994,  and  formed
CINergy Corp. with CG&E and PSI now being called the "CINergy
Operating Companies"; and

     0.04 WHEREAS, CG&E, PSI and CINergy Services are parties
to  a  Service Agreement, dated March 2, 1994, which has been
approved  by the Securities and Exchange Commission  and  the
Indiana  Utility  Regulatory Commission (IURC),  under  which
CINergy  Services  will act as PSI*s agent  in  administering
PSI*s interconnection agreements and the three companies  are
also  parties to an Operating Agreement, dated March 2, 1994,
on  file  with and accepted by the FERC and approved  by  the
IURC   under   which  CINergy  Services  will  dispatch   the
generating units of CG&E, PSI and CINergy Services; and

     0.05  WHEREAS,  the Parties desire to  modify  the  1992
Agreement, as hereinafter set forth; and

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

                         ARTICLE 1
             PROVISIONS FOR, AND CONTINUITY OF
                  INTERCONNECTED OPERATION

          1.01.    Interconnection  Points.   The  respective
138,00 volt and 345,000 volt transmission systems of IPL  and
PSI are presently interconnected at the following points:

     (i)   The 138kV Five Points Interconnection Point
     (ii)  The 345kV Whitestown Interconnection Point

     (iii) The 345kV Gwynneville Interconnection Point
     (iv)  The 138kV Petersburg Interconnection Point
     (v)   The 345kV Petersburg Interconnection Point
     (vi)  The 138kV Centerton Interconnection Point
     (vii) The 138kV Carmel Tap Point

          1.02.  Future Interconnection Points.  The services
provided  for  by  the 1992 Agreement may  also  be  rendered
through  such other points of interconnection as the  Parties
may later agree upon by amending the 1992 Agreement.

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

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

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

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

                         ARTICLE 2
                  SERVICES TO BE RENDERED

          2.01.   Interconnection Services Schedules.  It  is
the  purpose  of  the  Parties to seek  and  realize,  on  an
equitable  basis,  all  benefits  which  may  be  practicably
effected   through   coordination  in   the   operation   and
development of their respective systems.  It is understood by
the  Parties that such benefits may be realized  by  each  of
them  by  carrying  out  under stated  terms  and  conditions
various  interconnection services and transactions  that  may
from time to time include among others:
     (i)   The furnishing of emergency service,
     (ii)  The  interchange, sale, and purchase of  energy  to
           effect operating economies,
     (iii) The  sale and purchase of short term electric
           power  and  energy available on the system  of  one
           Party and needed on the system of the other, and
     (iv)  The  transmission of power and energy on the  basis
           of simultaneous transfers.

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

          2.02.     Specific Terms and Conditions.  Since the
specific  services  to  be rendered in  furtherance  of  such
purpose will vary during the term of the 1992 Agreement,  and
the  terms  and  conditions applicable to such  services  may
require  modification from time to time, it is intended  that
such   specific   services  and  the  terms  and   conditions
applicable  thereto  will be set forth in  Service  Schedules
mutually  agreed  upon  between the  parties.   Such  Service
Schedules,   unless   and  until  changed,   terminated,   or
supplemented,  shall  be  those  specified  in  Section  2.03
hereof.   If  a Service Schedule under the 1992 Agreement  is
changed or supplemented, such Service Schedule shall be fully
restated in order to reflect such change or supplement.

          2.03.   Service Schedules.  The respective  Service
Schedules designated

Service Schedule A - Emergency Service
Service Schedule B - Interchange Energy
Service Schedule C - Short Term Power and Energy
Service Schedule D - Carmel Southeast Tap Power & Energy Transfer

have been agreed upon between the Parties, are identified  as
Exhibits  I,  II,  III,  and IV, respectively,  to  the  1992
Agreement and are attached hereto and made a part hereof  the
same  as if incorporated herein.  It is contemplated  by  the
Parties  that  all  additional mutually agreed  upon  Service
Schedules  will  be  made a part of the 1992  Agreement  upon
presentation and acceptance thereof.

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

"Out-of-Pocket Cost" of energy purchased from a  third  party
by the supplying Party shall consist of the total amount paid
therefore  by the supplying Party which otherwise  would  not
have  been  paid by such Party, plus any cost which otherwise
would not have been incurred, including, but not limited  to,
regulatory    commission   charges,   emission    allowances,
transmission losses and taxes related to such transaction.

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

     2.05.  Emission Allowances.  The federal Clean Air  Act,
as  amended,  42  U.S.C. Section 7401  et  seq.  (hereinafter
referred  to as "Clean Air Act"), establishes certain  annual
maximum  sulfur dioxide ("SO2") levels, stated  in  terms  of
required  emission  allowances, for  flue  gases  emitted  by
electric generating units, including units operated  by  IPL,
PSI  and  other  electric utilities who may  supply  electric
energy  for  transactions  under this  1992  Agreement.   The
generator of the electric energy supplied and delivered under
this  1992 Agreement is required by the Clean Air Act to have
adequate  "allowances" (as defined by Section 402(3)  of  the
Clean Air Act in conjunction with Section 403(f) of the Clean
Air  Act) in order to generate such electric energy.  To  the
extent  that either IPL or PSI are required by the Clean  Air
Act to have additional allowances by reason of its generation
of  electric  energy  to be supplied by it  under  this  1992
Agreement,  which allowances would otherwise  not  have  been
required  by such supplying Party, then, unless the supplying
Party  otherwise  agrees  in  advance  in  writing,  at   the
discretion  of the supplying Party, the Party receiving  such
energy  shall  be  responsible for the  cost  or  the  actual
furnishing (without cost to the supplying Party) of  adequate
allowances to the supplying Party in order for such Party  to
supply  such  energy under this Agreement. The Parties  shall
establish,  by  mutual agreement, appropriate  procedures  in
order  to  carry  out  the provisions of this  Section  2.05,
including a statement of costs before any transactions  under
the  Service  Schedules attached hereto are  started.   Also,
prior  to  implementation  of  every  transaction  under  the
Service Schedules attached hereto, the purchasing Party  must
declare  whether  they  will  pay  in  cash  or  return   SO2
Allowances  in-kind  for any consumption  of  SO2  Allowances
directly attributed to such transaction, if any.

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

When  IPL  is the supplier of energy and emission allowances,
the   recovery  of  the  applicable  costs  for  the   actual
furnishing  of  adequate  allowances  in  order  for  IPL  to
generate  and supply such energy will be implemented  in  the
following manner:
     (1)   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.

(1)  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 Subsection 2(b) of this
     Section 2.05, at the time of the sale.

     If  Buyer opts to reimburse IPL in SO2 Allowances, Buyer
     will record or transfer to IPL*s account, the number  of
     SO2  Allowances  calculated  below,  at  the  time  cash
     settlement  for the energy is due.  In all cases,  Buyer
     will  transfer  to  IPL*s  account  the  number  of  SO2
     Allowances  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.

(2)  Determination of SO2 Emission Allowances Due IPL

     (a)  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.
     (b)  Cost of SO2 Allowances

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

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

(1)  The  current  Environmental  Protection  Agency  ("EPA")
     auction price to value emission allowances will be  used
     for  energy  sales transactions.  The dispatch  criteria
     may  be  revised  from  time to  time  if  the  emission
     allowance purchases on the average are determined to  be
     significantly different than the EPA auction price.

(2)  For each hour in which there is a transaction for energy
     services  using  an Out-of-Pocket Cost rate  under  this
     1992 Agreement, PSI will:

     (a)  identify the generation sources used to provide the
          transaction*s energy by identifying the energy that
          would  not  have been used had the transaction  not
          been  in effect that hour by using the same  after-
          the-fact incrementing costing model that is used to
          calculate  the incremental cost of fuel under  this
          1992 Agreement;

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

# OF UNITS
E  [MBTU SALE - MBTU NO SALE] * [SO2] * [100%-SE]
             100%

MBTU SALE = Million BTU consumed on unit n with sale.
MBTU NO SALE = Million BTU consumed on unit n without sale.
SO2 = Tons of SO2 produced per million BTU of fuel burned.
SE = Scrubber Efficiency in %.

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

     (3)  The  purchasing  Party  of energy  shall  have  the
          option   of   purchasing  or   providing   emission
          allowances  for  each transaction.  The  purchasing
          Party  shall notify PSI of its election to purchase
          or  provide emission allowances prior to the  start
          of   the  transaction.   The  running  quantity  of
          emission  allowances charged or furnished  will  be
          shown  on  the  monthly invoices to the  purchasing
          Party.

     (4)  When  the  purchasing  Party of  energy  elects  to
          purchase the emission allowances from PSI, then the
          quantity  of  emission  allowances  used  will   be
          included  as  part of the charges  on  the  monthly
          invoices to the purchasing Party.

     (5)  By  January 15th of the year following the calendar
          year   in  which  the  transaction  occurred,   the
          purchasing  Party  of  energy  shall  transfer  the
          appropriate  emission allowances  to  PSI  for  the
          emission  allowances used when the  allowances  are
          provided in kind.
     (6)  PSI   has   adopted   the  same  incremental   cost
          calculation   to  value  emission  allowances   for
          dispatch    criteria   as   for   billing    energy
          transactions.
                         ARTICLE 3
                     SERVICE CONDITIONS

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

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

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

                         ARTICLE 4
              DELIVERY POINTS, MEETING POINTS,
                        AND METERING

     4.01.       Delivery   Points.   All   electric   energy
delivered  under the 1992 Agreement shall be of the character
commonly  known as three-phase sixty Hertz energy, and  shall
be  delivered  at the Interconnection Points specified  under
Section 1.01 hereof, at a nominal voltage of 138,000 volts at
the  Five Points and Centerton Interconnection Points, at the
138KV Petersburg Interconnection Point, and at the Carmel Tap
Point;  and  at  a nominal voltage of 345,000  volts  at  the
Whitestown and Gwynneville Interconnection Points, and at the
345KV  Petersburg Interconnection Point; and  at  such  other
points  and voltages as hereafter may be agreed upon  by  the
parties pursuant to Section 1.02 hereof.

     4.02.      Billing  Based on Scheduled Transaction.   As
IPL  and  PSI  systems are interconnected with other  systems
forming  a  network, it is recognized that,  because  of  the
physical  and  electrical characteristics of  the  facilities
involved, a part or all of the energy being transferred  from
one  Party  to the other may flow through such other  systems
rather than through the point or points of connection between
the systems of the Parties.  A part or all of the power being
transferred  between other systems in the  network  may  flow
through the point or points of connection between the systems
of the Parties, and as a result be included in the demand and
energy   meter   readings  at  the   point   or   points   of
interconnection.  Therefore, all billings shall be  based  on
scheduled  transactions  or upon methods  determined  by  the
Operating  Committee  which may result  from  development  of
arrangements  with  other interconnected  systems  and  which
provide  a  basis  for accounting for the  power  and  energy
transfers actually contracted for between the Parties.
     4.03.      Metering Points.  Electric power  and  energy
supplied  and  delivered under the 1992  Agreement  shall  be
measured  by  suitable  metering  equipment  which  shall  be
provided,  owned and maintained by PSI or ILP  as  designated
below at the following metering points:

     (i)  138,000 volt metering equipment installed by PSI at
          the  Five  Points Substation; 138,000 volt metering
          equipment   installed  by  PSI  at  the   Centerton
          Substation;  138,000  and  345,000  volt   metering
          equipment   installed  by  IPL  at  the  Petersburg
          Station;  345,000 volt metering equipment installed
          by  IPL  at its Sunnyside Substation and  at  PSI*s
          Gwynneville and Whitestown Substations; and 12.47kV
          metering  equipment installed by PSI at its  Carmel
          Southeast Substation, and

     (ii) At  such other locations as hereafter may be agreed
          upon  by  the  Parties  pursuant  to  Section  1.02
          hereof.

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

     4.05.      Measurement of Electric Energy.  Measurements
of  electric  energy for the purpose of effecting settlements
under  the 1992 Agreement shall be made by standard types  of
electric  meters  installed and maintained (unless  otherwise
provided  for in the Agreement) by the owner at the  metering
points  described in Section 4.03 above.  The timing  devices
of all meters having such devices shall be maintained in 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  as
hereinabove provided, the other Party shall have the right to
install  check  metering equipment at the aforesaid  metering
points.  Metering equipment so installed by one Party on  the
premises of the other Party, unless otherwise provided for in
the  1992  Agreement, shall be owned and  maintained  by  the
Party  installing  such equipment.  Upon termination  of  the
1992  Agreement,  the  Party owning such  metering  equipment
shall  remove  it  from  the premises  of  the  other  Party.
Authorized representatives of both Parties shall have  access
at  all reasonable hours to the premises where the meters are
located and to the records made by the meters.

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

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

                         ARTICLE 5
                   RECORDS AND STATEMENTS

     5.01.      Records.   In  addition  to  records  of  the
metering provided for in Article 4 hereof, the Parties  shall
keep  in  duplicate such other records as may  be  needed  to
afford  a clear history of the various deliveries of electric
energy  made by one Party to the other and of the  clock-hour
integrated demands in kilowatt-hours delivered by  one  Party
to the other.  In maintaining such records, the Parties shall
effect  such  segregations  and allocations  of  demands  and
electric  energy  delivered  into  classes  representing  the
various   services  and  conditions  as  may  be  needed   in
connection  with settlements under the 1992  Agreement.   The
originals of all such records shall be retained by the  Party
keeping  the  records and the duplicates shall  be  delivered
monthly to the other Party, except that the Parties may agree
upon a different time interval for such delivery.

     5.02.      Statements.  As promptly as practicable after
the  end of each calendar month, the Parties shall prepare  a
statement  setting  forth  the  electric  power  and   energy
transactions  between the Parties during such month  in  such
detail  and  with  such segregations as  may  be  needed  for
operating records or for settlements under the provisions  of
the 1992 Agreement.
                         ARTICLE 6
                   BILLINGS AND PAYMENTS

     6.01.      Billing Period. Unless otherwise agreed  upon
by  the  Parties,  the calendar month shall be  the  standard
billing period for all settlements under the 1992 Agreement.

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

     6.03.     Billing Payments.  All bills for amounts  owed
by  one  Party to the other Party shall be due on  the  first
business day following the twentieth (20th) day after the end
of  the calendar month or period service was rendered, or  on
the  fifteenth  (15th) business day following  receipt  of  a
bill,  whichever  is  later.   Payments  shall  be  made   by
electronic  transfer  or  by such  other  mutually  agreeable
method  as shall cause such payment to be available  for  the
account of the payee on or before the due date.  Interest  on
unpaid  amounts,  both principal and interest,  shall  accrue
daily  at  the then current prime interest rate per annum  of
The  Chase Manhattan Bank, N.A., New York, New York, plus two
percent (2%) per annum, or the maximum rate permitted by law,
whichever  is  less, from the date due until  the  date  upon
which payment is made.

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

     6.05.      Billing  Disputes.  If a Party  disputes  the
correctness of a bill, such Party will, nevertheless, pay the
undisputed  portion of such bill, plus a minimum of  one-half
(1/2)  of the disputed amount, and shall submit to the  other
Party  a written statement detailing the items disputed.   If
the Parties are unable to agree upon the disputed items, such
items  shall  be  submitted to the  Operating  Committee  for
further action consistent with the 1992 Agreement.
                         ARTICLE 7
                    OPERATING COMMITTEE

     7.01.      Operating Committee Organization and  Duties.
To  coordinate the operation of their respective  generation,
transmission,  and substation facilities in  order  that  the
benefits of the 1992 Agreement may be realized by the Parties
to   the  fullest  practicable  extent,  the  Parties   shall
establish  a  committee of authorized representatives  to  be
known  as the Operating Committee.  Each of the Parties shall
designate in writing delivered to the other Party, the person
who  is  to  act  as its authorized representative  (the  "OC
Representative") on said committee (and the person or persons
who may serve as Alternate whenever the OC Representative  is
unable  to  act).   The OC Representative  and  Alternate  or
Alternates   shall   each  be  persons  familiar   with   the
generation, transmission, and substation facilitates  of  the
system  of the Party he represents, and each shall  be  fully
authorized  (i) to cooperate with the other OC Representative
(or  Alternates) and (ii) as the need arises and  subject  to
the  declared intentions of the Parties as herein  set  forth
and to the terms hereof and the terms of any other agreements
then  in  effect between the Parties, to determine and  agree
from time to time upon the following:

     (i)  All  matters  pertaining  to  the  coordination  of
          maintenance  of  the  generation  and  transmission
          facilities of the Parties.

     (ii) 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.

     (iii)      Such  other matters not specifically provided
          for herein upon which cooperation, coordination and
          agreement  as to quantity, time, method, terms  and
          conditions  are  necessary,  in  order   that   the
          operation of the respective systems of the  Parties
          may  be  coordinated to the end that the  potential
          benefits  anticipated  by  the  Parties   will   be
          realized to the fullest extent practicable.

     7.02.      Operating Committee Access.  For the  purpose
of inspection and reading of meters, checking of records, and
all  other pertinent matters, the OC Representative and their
Alternates  shall have the right of entry at  any  reasonable
time  to all property of the Parties used in connection  with
the performance of the 1992 Agreement.

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

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

     7.05.       Authority  to  Amend  or  Supplement.    The
Operating  Committee  may  recommend  changes  to  the   1992
Agreement,  but  said  Operating  Committee  shall  not  have
authority to amend or supplement the 1992 Agreement.

                         ARTICLE 8
            CONTINUITY AND SUSPENSION OF SERVICE
               RELATIVE RESPONSIBILITIES AND
                      LIABILITY LIMITS

     8.01.      Continuity and Suspension of  Service.   Each
Party  shall  exercise  reasonable  care  and  foresight   to
maintain  continuity  of  service as  provided  in  the  1992
Agreement.   In  no event shall one Party be  liable  to  the
other Party or its customers for loss or damage arising  from
failure  to provide or for the interruption or suspension  of
any  service  provided for herein.  Each Party  reserves  the
right to suspend service without liability at such times  and
for  such  periods and in such manner as it deems  advisable,
including, without limitation, suspensions for the purpose of
making  necessary adjustments to, changes in, or repairs  on,
its  facilities and to suspend service in cases where, in its
sole  opinion, the continuance of service to the other  Party
would  endanger persons or property.  Both Parties shall  use
their  best  efforts  to provide each other  with  reasonable
notice in the event of suspension of service.

     8.02.     Relative Responsibilities.  Each Party assumes
all responsibility for receipt and delivery of electricity on
its   system  to  and  from  the  Points  of  Interconnection
specified  in Section 1.01 hereof or agreed upon pursuant  to
Section    1.02   hereof.    Neither   Party   assumes    any
responsibility    with   respect   to    the    construction,
installation, maintenance or operation of the system  of  the
other  Party or of the systems of third parties, in whole  or
in  part.  In no event shall one Party be liable to the other
Party  for  damage  or  injury to  any  person  or  property,
whatsoever,  arising,  accruing or  resulting  from,  in  any
manner,   the   receiving,   transmission,   control,    use,
application  or  distribution  of  said  electric  power  and
energy.   Each  Party  shall  use  reasonable  diligence   to
maintain  its facilities in proper and serviceable condition,
and   shall   take  reasonable  steps  and  precautions   for
maintaining  the services agreed to be provided and  received
under  the  1992 Agreement.  Each Party shall be  responsible
for  its  own  compliance  with all applicable  environmental
regulations and shall bear all costs arising from its failure
to comply with such environmental regulations.

     8.03.      Limitation of Liability.  In no  event  shall
one  Party  be  liable to the other Party for  any  indirect,
special, incidental or consequential damages with respect  to
any claim arising out of the 1992 Agreement.

                         ARTICLE 9
                     TERM OF AGREEMENT

     9.01.      The  term of the 1992 Agreement  and  of  the
annexed  Service Schedules shall begin as of May 1, 1992  and
(except for Service Schedule D) shall continue through  April
30,  2022 (the "Initial Term"); thereafter, the Agreement and
Service  Schedules (except Service Schedule D) shall continue
for successive terms of three (3) years each unless and until
terminated  by  either Party by giving notice  to  the  other
Party  of  its  intention to terminate the 1992 Agreement  at
least  two (2) years prior to the end of the Initial Term  or
any  successive term; provided, that the 1992 Agreement shall
not  be deemed to have terminated until all prior commitments
for  sales  or purchases of power and energy hereunder  shall
have  been  fulfilled and all payments shall have been  made.
The  term of Service Schedule D shall be as provided therein.
Any  notice  of termination hereunder shall be given  to  the
President or Chief Operations Officer of a Party with a  copy
to the OC Representative of such Party.

                         ARTICLE 10
                          WAIVERS

     10.01.     Any  waiver at any time by  either  party  of
their  rights  with  respect to  a  default  under  the  1992
Agreement,  or  with respect to any other matter  arising  in
connection  with  the 1992 Agreement shall not  be  deemed  a
waiver with respect to any subsequent default or matter.  Any
delay,  short  of  the  statutory period  of  limitation,  in
asserting  or  enforcing any right under the  1992  Agreement
shall not be deemed a waiver of such right.

                         ARTICLE 11
                           TAXES

     11.01.     If  at any time during the term hereof  there
should  be levied or assessed against either Party any direct
tax  by  any  taxing authority on the capacity or energy  (or
both)  generated, purchased, sold, transmitted,  interchanged
or  exchanged by it, which tax is in addition to or different
from  the  forms  of such direct tax as are being  levied  or
assessed as of the date hereof and such direct tax results in
increasing the cost of either or both the Parties in carrying
out  the provisions of the 1992 Agreement, then such increase
shall be reflected in the charges for capacity or energy  (or
both)  furnished  by one Party to the other hereunder  as  is
necessary  in order to make adequate and equitable allowances
for such tax.

                         ARTICLE 12
                          NOTICES

     12.01.     Notices Relating to Provisions  of  the  1992
Agreement.   Except as herein otherwise provided, any  notice
which  may be given to or made upon either Party by the other
Party,  under  any of the provisions of the  1992  Agreement,
shall  be  in  writing  unless it is  otherwise  specifically
provided herein, and shall be treated as duly delivered  when
the  same is either (a) personally delivered to the President
or  Chief  Operations  Officer of  the  other  Party  or  (b)
deposited  in  the  United States mail, postage  prepaid  and
properly  addressed  to  the President  or  Chief  Operations
Officer  of  the other Party; provided, however, that  either
Party may alter its recipient for notice hereunder by written
notice  to  the other Party in accordance with the provisions
of this Section 12.01.

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

                         ARTICLE 13
                   REGULATORY AUTHORITIES

     13.01.     Regulatory Authority.  The 1992 Agreement  is
made   subject  to  the  authority  of  the  Federal   Energy
Regulatory  Commission  or any other governmental  regulatory
agency having jurisdiction in the premises and, if any of the
terms and conditions hereof are altered or made impossible of
performance  by  order,  rule,  or  regulation  of  any  such
regulatory agency, and the Parties hereto are unable to agree
upon  a  modification of such terms and conditions that  will
satisfy  such order, rule, or regulation, then neither  Party
shall be liable to the other for failure thereafter to comply
with  such  terms and conditions; provided,  that  if  either
Party deems that the failure of such performance results in a
substantial  breach  of  the 1992 Agreement,  then  the  1992
Agreement may be terminated forthwith upon thirty (30)  days*
advance written notice.

     13.02.     Amendments.   The  1992  Agreement  and   the
annexed  Service Schedules may be amended by mutual agreement
of the Parties, which amendment shall be in writing and shall
become  effective  in accordance with Section  13.01  hereof.
The  rates  and  charges  set forth in  the  annexed  Service
Schedules are subject to amendment and change, and each party
reserves  the  right from time to time to seek  unilaterally,
from any regulatory agency having jurisdiction, amendments or
changes  in  its  rates  and charges  set  forth  therein  in
accordance with the applicable law.  Nothing contained in the
1992   Agreement,  any  annexed  Service  Schedule   or   any
supplements  thereto shall be construed as affecting  in  any
way   the   right  of  either  Party  unilaterally  to   make
application  to the Federal Energy Regulatory Commission  (or
any  successor regulatory agency having jurisdiction)  for  a
change  in  rates under Section 205 of the Federal Power  Act
and   pursuant  to  the  Commission*s  Rules  and  Regulation
promulgated  thereunder  (or under  comparable  statutes  and
regulations   of   a  successor  regulatory   agency   having
jurisdiction).

                         ARTICLE 14
                       MISCELLANEOUS

     14.01.    No Partnerships; Tax Matters.  Notwithstanding
any  provision  of  the 1992 Agreement to the  contrary,  the
Parties  do  not  intend to create hereby any joint  venture,
partnership, association taxable as a corporation,  or  other
entity  for the conduct of any business for profit,  and  any
construction of the 1992 Agreement to the contrary which  has
an  adverse tax effect on either Party shall render the  1992
Agreement null and void from its inception.

     14.02.     Computation of Time.  In computing any period
of  time prescribed or allowed by the 1992 Agreement, the day
of  the  act,  event,  or default from which  the  designated
period  of time begins to run shall be excluded but the  last
day  of  such  period  shall  be included,  unless  it  is  a
Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next business day which is not
a Saturday, Sunday, or legal holiday.

     14.03.     Section Headings Not to Affect Meaning.   The
descriptive  headings of the Articles, Sections,  Subsections
and  paragraphs of the 1992 Agreement have been inserted  for
convenience only and shall not modify or restrict any of  the
terms and provisions thereof.

                         ARTICLE 15
                         ASSIGNMENT

     15.01.     The 1992 Agreement shall inure to the benefit
of,  and  be  binding  upon,  the respective  successors  and
assigns of the Parties, but the assignment thereof by a Party
shall not relieve such Party, without the written consent  of
the  other Party, of any obligation to supply, or to take and
pay for, as the case may be, the services hereunder.

                         ARTICLE 16
             ENTIRE AGREEMENT CONTAINED HEREIN

     16.01.      The  1992  Agreement  contains  the   entire
agreement  between  the  Parties in respect  of  the  subject
matter  hereof,  and  there  are no  other  understanding  or
agreements between the Parties in respect thereof;  provided,
however,  that nothing contained in the 1992 Agreement  shall
be  deemed  to affect in any manner whatsoever any rights  or
claims either Party may have against the other Party pursuant
to any other agreement in effect before the effective date of
the  1992 Agreement with respect to any matter, including any
right  or claim to payments after the effective date  of  the
1992 Agreement pursuant to other preexisting agreements.

                         ARTICLE 17
                 1962 AGREEMENT SUPERSEDED

     17.01.    The 1992 Agreement constitutes an amendment to
and  complete restatement of the 1962 Agreement and, as such,
supersedes  the 1962 Agreement from and after  the  date  the
1992 Agreement becomes effective.

                         ARTICLE 18
              AGENCY OF CINERGY SERVICES, INC.

     18.01.     CINergy  Services joins in the  execution  of
this Agreement for the sole purpose of serving and acting  as
agent for PSI.

IN WITNESS WHEREOF the Parties have caused the 1992 Agreement
to  be executed by their respectable duly authorized officers
and  their respective corporate seal to be hereunder  affixed
as of the date first above mentioned.

INDIANAPOLIS POWER & LIGHT
(IPL)

By:  /s/ John R. Brehm
     John R. Brehm
     Senior Vice President
     Finance and
     Information Services

Attest:

By:  /s/ Bryan G. Tabler
     Bryan G. Tabler
     Senior Vice President
     Secretary and
     General Counsel

CINERGY SERVICES, INC.
(CINergy Services)

By:  /s/ Terry E. Bruck
     Terry E. Bruck
     Group Vice President

PSI ENERGY, INC.
(PSI)

By:  /s/ John M. Mutz
     John M. Mutz
     President

               EXHIBIT I
               (First Revision)

                     SERVICE SCHEDULE A

                     EMERGENCY SERVICE

SECTION 1 - DURATION

1.1   This Service Schedule A, being a part of and under  the
Interconnection Agreement (referred to herein  as  the  "1992
Agreement"),  dated  as  of May 1, 1992,  among  Indianapolis
Power  &  Light  Company (hereinafter called "IPL")  and  PSI
Energy,  Inc.,  formerly  named  Public  Service  Company  of
Indiana,   Inc.  (hereinafter  called  "PSI")   and   CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall
become  effective  as  of the effective  date  of  the  Third
Amendment,  dated  June 30, 1995, to the 1992  Agreement  and
shall continue in effect throughout the duration of the  1992
Agreement.   IPL,  PSI  and CINergy  Services  are  sometimes
hereinafter   referred   to  individually   as   "Party"   or
collectively as "Parties" where appropriate.

SECTION 2 - SERVICES TO BE RENDERED

2.1   Conditional  Service.  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 any 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, another Party
shall  deliver  to  such Party electric  energy  that  it  is
requested  to deliver; provided, however, that a Party  shall
not  be  obligated to deliver such energy which, in its  sole
judgment,  it cannot deliver without interposing a hazard  to
or  economic burden upon its operations or without  impairing
or jeopardizing the other load requirements of its system and
provided further, that a Party shall be obligated to  deliver
electric  energy to another Party for a period in  excess  of
forty-eight   (48)  consecutive  hours  during   any   single
emergency.

2.2    Non-performance.   The  Parties  recognize  that   the
delivery of electric energy as provided 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  a  Party  may  be
delivering   electric  energy,  under  a   mutual   emergency
interchange   agreement,   to   the   system    of    another
interconnected company which is suffering any emergency in or
on its system.  Under conditions as cited under (a) above,  a
Party  shall not be considered to be in default hereunder  if
it is unable to comply with the provisions of said Subsection
2.1.   Under  conditions as cited under (b)  above,  a  Party
shall  not be considered to be in default hereunder if it  is
unable to comply with the provisions of said Subsection  2.1;
provided,  however, that such Party shall make  every  effort
consistent  with  the terms of its contract with  said  other
interconnected  company  to  make  the  electric  energy   as
provided in Subsection 2.1 available to another Party  hereto
as soon as possible.
2.3   Reserve Generating Capacity Review.  If at any time the
record over a reasonable prior period shows clearly that  one
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, a Party, by written  notice
given  to  another 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 1992 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  1992
Agreement, and, if inadequate, the extent of the burden  that
a  Party may be placing upon another Party.  If it should  be
found  that  a Party is placing an unreasonable  burden  upon
another Party, the Party causing such burden shall take  such
measures  as are necessary to remove the burden from  another
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  When IPL is the Supplying Party:

     3.11   Emergency Energy delivered that is  generated  by
IPL shall be settled for, at the option of IPL, either by the
return  of  equivalent energy at a mutually  acceptable  time
upon  request of IPL or by payment of the greater of (a) 110%
of the Out-Of-Pocket Cost (such cost being as of the delivery
point  or points, as referred to in Section 4.01 of the  1992
Agreement,  taking  into account electrical  losses  incurred
from  the  source or sources of such energy to  the  delivery
point  or points) of supplying such energy, or (b) $0.10  per
kilowatt-hour.

     3.12   Emergency Energy delivered that is  purchased  by
IPL from a third party shall be settled for by payment of  an
energy charge of 100% of the Out-Of-Pocket Cost paid therefor
by  IPL,  plus an amount to be agreed upon by the Parties  at
the time of the transactions of up to 4.6 mills per kilowatt-
hour  (consisting  of up to 3.6 mills per  kilowatt-hour  for
bulk  transmission  charge plus 1 mill per kilowatt-hour  for
difficult  to  quantify  energy-related  costs),   plus   any
transmission losses resulting on IPL's system on  account  of
the  transaction,  and  plus any taxes  incurred  by  IPL  on
account of the transaction.

3.2  When PSI is the Supplying Party:

     3.21   Emergency Energy delivered that is  generated  by
     PSI  shall  be settled for by payment of the greater  of
     (a)  110% of the Out-Of-Pocket Cost (such cost being  as
     of  the interconnection point or points, as referred  to
     in  Section  4.01  or  the 1992 Agreement,  taking  into
     account  electrical losses incurred from the  source  or
     sources  of such energy to the interconnection point  or
     points) of supplying such energy.  Non-firm transmission
     service  per  the  provisions of the  CINergy  Services,
     Inc., FERC Electric Tariff, Original Volume No. 3,  Non-
     Firm Point-to-Point Transmission Service Standard Tariff
     -  NFT  (or any successor transmission tariff of similar
     service)  must  be obtained, or (b) $100  per  megawatt-
     hour.

     3.22   Emergency Energy delivered that is  purchased  by
     PSI  from a third party shall be settled for by  payment
     of the greater of (a) of an energy charge of 100% of the
     Out-Of-Pocket Cost paid therefor by PSI plus  $1.00  per
     megawatt-hour  (for difficult to quantify energy-related
     costs),  plus any transmission losses resulting  on  the
     system of the CINergy Operating Companies on account  of
     the  transaction.  Non-firm transmission service per the
     provisions of the CINergy Services, Inc., FERC  Electric
     Tariff,  Original Volume No. 3, Non-Firm  Point-to-Point
     Transmission  Service  Standard Tariff  -  NFT  (or  any
     successor  transmission tariff of similar service)  must
     be  obtained, and plus any regulatory commission charges
     and taxes incurred by PSI on account of the transaction,
     or (b) $100 per megawatt-hour.

3.3   If  the  option  of  returning  electric  energy  under
Subsection  3.11 is exercised, then it shall be  returned  at
times when the load conditions of the Party receiving it  are
equivalent to the load conditions of such Party at  the  time
the energy for which it is returned was delivered or, if such
Party   elects  to  have  equivalent  energy  returned  under
different  conditions, it shall be returned in such  amounts,
to  be  agreed  upon  by the Operating  Committee  under  the
Agreement, as will compensate the Party for the difference in
conditions.

               EXHIBIT II
               (First Revision)

                     SERVICE SCHEDULE B

                     INTERCHANGE ENERGY

SECTION 1 - DURATION

1.1   This Service Schedule B, being a part of and under  the
Interconnection Agreement (referred to herein  as  the  "1992
Agreement"),  dated  as  of May 1, 1992,  among  Indianapolis
Power  &  Light  Company (hereinafter called "IPL")  and  PSI
Energy,  Inc.,  formerly  named  Public  Service  Company  of
Indiana,   Inc.  (hereinafter  called  "PSI")   and   CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall
become  effective  as  of the effective  date  of  the  Third
Amendment,  dated  June 30, 1995 to the  1992  Agreement  and
shall continue in effect throughout the duration of the  1992
Agreement.   IPL,  PSI  and CINergy  Services  are  sometimes
hereinafter   referred   to  individually   as   "Party"   or
collectively as "Parties" where appropriate.

SECTION 2 - SERVICES TO BE RENDERED

     Economy Energy

2.1   It is recognized that from time to time that any of the
Parties  may  have  electric energy (herein  called  "Economy
Energy")  available from surplus capacity either on  its  own
system  or from sources outside its own system, or both,  and
that  Economy Energy could be supplied to another Party at  a
cost  that would result in operating savings to such  another
Party.    Such  operating  savings  would  result  from   the
displacement  of  electric energy  that  otherwise  would  be
supplied from capacity either on such other Party's system or
from sources outside its own system, or both. To promote  the
economy  of  electric power supply and to  achieve  efficient
utilization of production capacity, any Party, whenever it in
its  sole  judgment determines Economy Energy  is  available,
may,  but shall not be obligated to, offer Economy Energy  to
another Party.  Promptly upon receipt of any such offer  said
Party  shall notify the offering Party of the extent to which
it   desires  to  use  such  Economy  Energy,  and  schedules
providing  the  periods and extent of use shall  be  mutually
agreed upon by the Parties.  Such energy is non-firm and  may
be  withdrawn by the supplying Party with a ten  (10)  minute
notification.  A transaction made by PSI and CINergy Services
under  this Service Schedule B shall not extend beyond twelve
(12) months.

     Non-Displacement Energy

2.2   It  is  further  recognized  that  from  time  to  time
occasions  will arise when the effecting of transactions,  as
provided  in  Subsection  2.1 of  this  Section  2,  will  be
impracticable,  but at the same time one of the  Parties  may
have   electric   energy  (herein  called   "Non-Displacement
Energy")  which it is willing to make available from  surplus
capacity either on its own system or from sources outside its
own  system, or both, that can be utilized advantageously for
short   intervals  by  another  Party.   It  shall   be   the
responsibility  of  the Party desiring the  receipt  of  Non-
Displacement Energy to initiate the receipt and  delivery  of
such energy.  Any Party desiring such receipt of energy shall
inform another Party of the extent to which it desires to use
Non-Displacement  Energy, and whenever in its  sole  judgment
such  another  Party determines that it has  Non-Displacement
Energy  available, schedules providing the periods and extent
of  use  shall  be mutually agreed upon by the Parties.   Any
Party  shall  not  be obligated to make any  Non-Displacement
Energy available to another Party.

2.3   PSI may reduce or discontinue the supply of Hourly Non-
Displacement  Energy  at any time.  To the  extent  possible,
however,  PSI  shall  advise IPL of its intention  to  reduce
materially   or  discontinue  the  supply  of   Hourly   Non-
Displacement Energy.

2.4   PSI  shall  supply  Daily and  Weekly  Non-Displacement
Energy  for three (3) hours after they have notified  IPL  of
its  intention to discontinue such supply of energy; however,
PSI  shall  be under no obligation to continue the supply  of
said  energy  for  more  than  three  (3)  hours  after  said
notification.

2.5   A  transaction made by PSI under Subsection  2.2  above
shall not extend beyond twelve (12) months.

SECTION 3 - COMPENSATION

     Economy Energy

3.1   The charge for Economy Energy purchased by a Party from
another Party shall be based on the principle that the  Party
purchasing it shall pay the Out-Of-Pocket Cost (including all
operating,  maintenance, tax, regulatory commission  charges,
transmission  losses and other expenses incurred  that  would
not  have  been incurred if the energy had not been supplied)
being at the interconnection points (as defined in Article  4
of  the  1992 Agreement), of the Party supplying such  energy
and  that the resulting savings to the receiving Party  shall
be  equally  shared  by the supplying and receiving  Parties.
Prior  to any transaction involving the delivery and  receipt
of  Economy Energy, authorized representatives of the Parties
shall determine and agree upon the compensation applicable to
such  transaction.  Compensation so agreed upon shall not  be
subject to later review or adjustment.  PSI shall dedicate an
amount   at  the  time  of  the  transactions  for   non-firm
transmission  service  per  the  provisions  of  the  CINergy
Services, Inc., FERC Electric Tariff, Original Volume No.  3,
Non-Firm Point-to-Point Transmission Service Standard  Tariff
-  NFT  (or  any  successor transmission  tariff  of  similar
service) from its portion of the resulting savings.

3.2   When  Economy Energy is obtained from or  delivered  to
other  systems  interconnected  with  the  Parties,  but  not
signatories to the 1992 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
which are defined as the difference between (1) what such Out-
Of-Pocket  Costs of the receiving Party or system would  have
been  to  generate  such energy, and (2)  such  Out-Of-Pocket
Costs  of the supplying Party or system providing the energy.
Such allocation shall be made as provided in Subsections 3.21
and 3.22 hereinbelow:

     3.21 The  transmitting Party shall be paid (a) its costs
          of  purchasing the energy supplied,  plus  (b)  its
          costs  of  additional transmission losses plus  (c)
          the following:

          (1)  When  IPL is such transmitting Party:  Fifteen
               percent  (15%) of the gross savings  remaining
               after   deducting   all  such   payments   for
               transmission losses.

          (2)  When PSI is the transmitting Party, they shall
               receive  the  greater of (a) 15% (such  charge
               pertains  to  the reservation of transmission)
               of the gross savings remaining after deducting
               all  such payments for transmission losses  or
               (b)  the  sum  of  a demand  charge  rate  per
               megawatt  reserved per hour at the  time  such
               Economy   Energy  is  reserved  for   non-firm
               transmission service per the provisions of the
               CINergy  Services, Inc., FERC Electric Tariff,
               Original Volume No. 3, Non-Firm Point-to-Point
               Transmission Service Standard Tariff - NFT (or
               any  successor transmission tariff of  similar
               service),  plus  $1.00 per megawatt-hour  (for
               difficult  to quantify energy-related  costs),
               plus any transmission losses resulting on  the
               system  of the CINergy Operating Companies  on
               account  of  the  transaction  and  plus   any
               regulatory   commission  charges   and   taxes
               incurred by PSI on account of the transaction.

     3.22 The supplying Party or system shall be paid its Out-
          Of-Pocket  Cost of providing the energy, plus  one-
          half of the gross savings remaining after deducting
          all  (b)  and  (c)  payments made under  Subsection
          3.21.   The  receiving Party  or  system  shall  be
          entitled to the other one-half of the gross savings
          remaining after deducting all (b) and (c)  payments
          made under Subsection 3.21.

     Non-Displacement Energy

3.3   Non-Displacement Energy delivered  hereunder  shall  be
settled  for either by the return of equivalent energy  (only
in  the  case where IPL is the supplying Party)  or,  at  the
option of the Party that supplied such energy, by payment  of
an  energy  charge  of up to 110% of the  Out-Of-Pocket  Cost
(such  cost  being  as of the delivery point  or  points,  as
provided  in Section 4.01 of Article 4 of the 1992 Agreement,
taking  into  account  electrical losses  incurred  from  the
source  or sources of such energy to said delivery  point  or
points)  to  the supplying Party generating such energy  plus
(the  applicable demand charge rates per this Subsection  are
limited by Subsections 3.7 and 3.8):
     3.31 When IPL is the supplying Party:

          3.31.1   IPL,  at its option, may impose  a  demand
          charge  of  up to 48.6 mills per kilowatt  reserved
          per  hour, but the total demand charge in  any  one
          day  shall  be no more than the product  of  $0.778
          times  the highest amount in kilowatts reserved  in
          any hour during the day.  Or,

          3.31.2   IPL, at its option, may choose  to  supply
          such  energy  without imposing a demand  charge  in
          which  case  no  additional  payment  is  included.
          However, if this option is chosen, the cost of such
          energy will be calculated as 110% of the actual Out-
          Of-Pocket Cost (such cost being as of the  delivery
          point  or  points, as provided in Section  4.01  of
          Article  4  of  the  1992  Agreement,  taking  into
          account electrical losses incurred from the  source
          or sources of such energy to said delivery point or
          points)  to  the  supplying Party  generating  such
          energy.

     3.32  When PSI is the supplying Party by payment of  the
following:

     (1)  For energy generated, the agreed upon demand charge
          rate  of  up to $50 per megawatt-hour (such  charge
          pertains  to  the production component  only),  the
          total demand charge in any one day shall be no more
          than the product of $797 and the greatest amount of
          megawatts reserved in any hour during said day  and
          the  total charge in any one week shall be no  more
          than  the product of $4,781 and the greatest number
          of megawatts reserved in any hour during said week.
          Non-firm transmission service per the provisions of
          the  CINergy Services, Inc., FERC Electric  Tariff,
          Original  Volume  No.  3,  Non-Firm  Point-to-Point
          Transmission Service Standard Tariff - NFT (or  any
          successor  transmission tariff of similar  service)
          must be obtained;

     (2)  For  daily energy which is purchased by PSI from  a
          third  party  for economic reasons to  meet  system
          needs but in subsequent system resources accounting
          calculations  is determined to have  been  used  to
          supply  a Daily Non-Displacement Energy transaction
          and  for which PSI stands by to supply from its own
          resources:  (a) the amount paid by PSI to the third
          party  for  such  energy,  plus  (b)  the  cost  of
          transmission losses, regulatory commission  charges
          and  taxes incurred which would not otherwise  have
          been incurred, plus (c) $1.00 per megawatt-hour for
          difficult-to-quantify energy  related  costs,  and,
          plus  (d) up to $50 per megawatt-hour (such  charge
          pertains  to  the production component  only),  the
          total  charge in any one day shall be no more  than
          the  product  of  $797 and the greatest  number  of
          megawatts reserved in any hour during said day  and
          the  total charge in any one week shall be no  more
          than  the product of $4,781 and the greatest number
          of megawatts reserved in any hour during said week.
          Non-firm transmission service per the provisions of
          the  CINergy Services, Inc., FERC Electric  Tariff,
          Original  Volume  No.  3,  Non-Firm  Point-to-Point
          Transmission Service Standard Tariff - NFT (or  any
          successor  transmission tariff of similar  service)
          must be obtained.

     3.33 If  equivalent energy is returned to IPL, it  shall
          be  returned  at times when the load conditions  of
          the  Party receiving it are equivalent to the  load
          conditions of such Party at the time the energy for
          which  it  is  returned was delivered or,  if  such
          Party  elects  to  have equivalent energy  returned
          under different conditions, it shall be returned in
          such  amounts,  to be agreed upon by the  Operating
          Committee, as will compensate for the difference in
          conditions.

3.4   Non-Displacement Energy delivered under Subsection  2.2
above  that is purchased by the supplying Party from  another
interconnected system which is not a signatory  to  the  1992
Agreement  ("Third Party") at the request  of  the  receiving
Party shall be settled for as follows:

3.41 When  IPL  is the supplying Party, by a payment  of  100
     percent of the amount paid to such Third Party,  plus  a
     demand  charge  in an amount to be agreed  upon  by  the
     Parties  at  the time of the reservation of  up  to  3.6
     mills  per  kilowatt reserved per hour,  but  the  total
     demand  charge in any one day shall be no more than  the
     product  of $0.058 times the highest amount in kilowatts
     reserved  in any hour during the day, plus  1  mill  per
     kilowatt-hour  (for difficult to quantify energy-related
     costs),  plus  the cost of any quantifiable transmission
     losses,  taxes, and other expenses incurred  that  would
     not  have been incurred if such transaction had not been
     made.

3.42 When  PSI  is  the  supplying Party:   by  (a)  non-firm
     transmission service per the provisions of  the  CINergy
     Services,  Inc.,  FERC Electric Tariff, Original  Volume
     No.  3,  Non-Firm  Point-to-Point  Transmission  Service
     Standard  Tariff  -  NFT (or any successor  transmission
     tariff  of similar service) must be obtained and (b)  an
     energy  charge  of 100% of the Out-of-Pocket  Cost  paid
     therefor  by  PSI,  plus  $1.00 per  megawatt-hour  (for
     difficult  to quantify energy-related costs),  plus  any
     transmission  losses  resulting on  the  system  of  the
     CINergy   Operating   Companies  on   account   of   the
     transaction, and plus any regulatory commission  charges
     and taxes incurred by PSI on account of the transaction.

3.5   Notwithstanding  the  rates stated  in  Subsection  3.3
above,  when  IPL  is  the supplying Party,  if  the  "demand
charge"  option of Section 3.31.1 is chosen, the sum  of  the
demand and energy charges for each specific reservation  made
pursuant  to  Section 2.2 of this Service  Schedule  B  which
includes a demand charge shall not:
     (1)  exceed the total of:

          (i)  The   product  of  the  number  of   kilowatts
               reserved   for  such  reservation  times   the
               maximum  hourly demand charge specified  above
               in Subsection 3.3; and

          (ii) The  product  of  the number of kilowatt-hours
               sup-plied for such reservation times  110%  of
               the  average cost per kilowatt-hour of  energy
               generated by IPL's Petersburg Unit No.  4  for
               the  last preceding month during which it  was
               run; or

     (2)  be  less than 100% of the total Out-Of-Pocket  Cost
          of  supplying the Non-Displacement Energy for  such
          reservation.

3.6   Notwithstanding  the  rates stated  in  Subsection  3.3
above, when PSI and CINergy Services are the supplying Party,
the  sum  of the demand and energy charges for each  specific
reservation  made  pursuant to Section 2.2  of  this  Service
Schedule B shall not:

     (1)  exceed the total of:

           (i) The   product  of  the  number  of   megawatts
               reserved   for  such  reservation  times   the
               maximum  hourly demand charge specified  above
               in Subsection 3.3; and plus
          (ii) The  product  of  the number of megawatt-hours
               supplied  for such reservation times  110%  of
               the  average cost per megawatt-hour of  energy
               generated  by the CINergy Operating Companies*
               Zimmer  Unit No. 1 and Gibson Unit No.  5  for
               the preceding month; nor

     (2)  be  less than 100% of the total Out-Of-Pocket  Cost
          of  supplying the Non-Displacement Energy for  such
          reservation.

3.7   The  aggregate instant total capacity of all IPL  sales
under  this and other Service Schedules which are a  part  of
this  and  other IPL Agreements, for which the rates  charged
have been supported on the basis that total revenues will not
exceed the costs of Petersburg Unit No. 4, is limited to  515
MW.

3.8   The  total power of all sales by the CINergy  Operating
Companies   and  CINergy  Services  under  this   and   other
agreements  of  the CINergy Operating Companies  and  CINergy
Services,  for  which  the  agreed  upon  demand  charge   is
determined based on Zimmer Unit No. 1 and Gibson Unit No.  5,
is  limited  to 925 MWs (CINergy Operating Companies*  Zimmer
Unit  No. 1 Net Demonstrated Capability of 612 MWs and Gibson
Unit  No.  5  Net Demonstrated Capability of 313 MWs)  on  an
hourly basis.  For sales in excess of the capacity limitation
of  925  MWs noted above, the rate shall consist of an energy
charge  of  up  to 110% of Out-of-Pocket Cost  and  a  demand
charge  of  up  to  $ 13 per megawatt per hour  (such  charge
pertains to the production component only), the total  charge
in  any one day shall be no more than the product of $209 and
the  greatest number of megawatts reserved in any hour during
said  day  and the total charge in any one week shall  be  no
more  than  the product of $1,252 and the greatest number  of
megawatts  reserved in any hour during said  week.   Non-firm
transmission  service  per  the  provisions  of  the  CINergy
Services, Inc., FERC Electric Tariff, Original Volume No.  3,
Non-Firm Point-to-Point Transmission Service Standard  Tariff
-  NFT  (or  any  successor transmission  tariff  of  similar
service)  must be obtained; but in no event shall  the  total
revenue  (energy charge and demand charge combined)  be  less
than  100% of the Out-of-Pocket Costs for supplying the  Non-
Displacement  Energy  for such reservation.   Notwithstanding
all  previous Subsections, when power is sold under both this
Subsection and Subsection 3.3 in any month, the total  demand
charge will be the applicable weighted average demand charges
in  this Subsection and Subsection 3.3.  Such weighting  will
be  developed  by adding the number of hours that  power  was
provided  under  this Subsection times the applicable  demand
charge  under  this Subsection and the number of  hours  that
power  was provided under Subsection 3.3 times the applicable
demand  charge in Subsection 3.3, with the sum being  divided
by  the applicable number of hours of the transaction (month,
week, day or hours).

               EXHIBIT III
               (First Revision)

                     SERVICE SCHEDULE C

                SHORT TERM POWER AND ENERGY

SECTION 1 - DURATION

1.1   This Service Schedule C, being a part of and under  the
Interconnection Agreement (referred to herein  as  the  "1992
Agreement"),  dated  as  of May 1, 1992,  among  Indianapolis
Power  &  Light  Company (hereinafter called "IPL")  and  PSI
Energy,  Inc.,  formerly  named  Public  Service  Company  of
Indiana,   Inc.  (hereinafter  called  "PSI")   and   CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall
become  effective  as  of the effective  date  of  the  Third
Amendment,  dated  June 30, 1995, to the 1992  Agreement  and
shall continue in effect throughout the duration of the  1992
Agreement.   IPL,  PSI  and CINergy  Services  are  sometimes
hereinafter   referred   to  individually   as   "Party"   or
collectively as "Parties" where appropriate.

SECTION 2 - SERVICES TO BE RENDERED

2.1   Any  Party,  by  giving the other Parties  notice,  may
reserve  from  the other Parties (a) electric power  ("Weekly
Short  Term Power") for periods of one or more weeks  or  (b)
electric power ("Daily Short Term Power") for periods of  one
or more days whenever the Party requested to reserve the same
is  willing  to  make such power available.   Under  ordinary
circumstances such reservation shall extend for not less than
a  calendar week if it begins with Sunday or for the  balance
of  the calendar week if it begins with any day subsequent to
Sunday; however, under unusual circumstances, the Parties may
mutually  agree upon a reservation of Daily or  Weekly  Short
Term  Power  for a lesser number of days.  In all  cases  the
Party  asked to supply Daily or Weekly 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  another
Party  as Short Term Power.  A transaction made by any  Party
under  this Service Schedule C shall not extend beyond twelve
(12) months.

     2.11  Prior to each reservation of Weekly or Daily Short
Term  Power,  the  number of megawatts to  be  reserved,  the
period of the reservation, the terms of such reservation, and
the  source of such power if the supplying Party is  in  turn
reserving such power from another interconnected system which
is  not  a  signatory to the 1992 Agreement ("Third  Party"),
shall  be determined by the Parties.  Such reservation  shall
be  confirmed  in writing at the request of  any  Party.   If
during  such period the conditions arise that could not  have
been  reasonably foreseen at the time of the reservation  and
cause  the  reservation  to be burdensome  to  the  supplying
Party,  such Party may by oral notice to the reserving Party,
such  oral  notice  to  be  later  confirmed  in  writing  if
requested  by  any  Party,  reduce the  number  of  megawatts
reserved by such amount and for such time as it shall specify
in  such  notice, but kilowatts reserved hereunder  that  the
supplying  Party is in turn reserving from a Third Party  may
be  reduced only to the extent they are reduced by such Third
Party.

     2.12  During each period that Weekly or Daily Short Term
     Power  has  been reserved, the Party that has agreed  to
     supply such power shall upon call by the reserving Party
     deliver  associated electric energy  ("Weekly  or  Daily
     Short  Term Energy") to the reserving Party  as  of  the
     interconnection point or points, as provided in  Section
     4.01 of Article 4 of the 1992 Agreement at a rate during
     each hour of up to and including the number of megawatts
     reserved.

SECTION 3 - COMPENSATION

3.1  Weekly Short-Term Power and Energy

     3.1.1   Except as otherwise provided in Subsection 3.1.3
     below,  when IPL is the supplying Party, PSI  shall  pay
     all   of   the  following  which  are  applicable   (the
     applicable  demand  charge rate per this  Subsection  is
     limited by Subsection 3.5):

          (a)  for  any week that Weekly Short-Term Power and
               Energy is reserved, a demand charge rate to be
               agreed  upon by the Parties at the  time  such
               Weekly   Short-Term  Power   and   Energy   is
               reserved,  at  a  rate  of  up  to  $3.89  per
               kilowatt reserved, except, for each day (other
               than  Sunday)  during any part  of  which  the
               amount  of  such Weekly Short-Term  Power  and
               Energy  is  reduced by IPL, the  total  demand
               charge shall be reduced by one-sixth (1/6)  of
               said  agreed upon demand charge rate for  each
               megawatt of the reduction;

          (b)  for Weekly Short-Term Energy delivered that is
               generated  by  IPL,  an energy  charge  to  be
               agreed upon by the Parties at the time of  the
               transaction of up to 110% of the Out-Of-Pocket
               Cost    (such   cost   being   as    of    the
               interconnection point or points, as defined in
               Article  4 of the 1992 Agreement, taking  into
               account  electrical losses incurred  from  the
               source  or  sources  of  such  energy  to  the
               interconnection point or points) of  supplying
               such energy;

          (c)  for Weekly Short-Term Energy delivered that is
               purchased by IPL from a Third Party, an energy
               charge of 100% of the Out-Of-Pocket Cost  paid
               therefor  by  IPL,  plus  one  (1)  mill   per
               kilowatt-hour  of such purchased  energy  (for
               difficult  to quantify energy-related  costs),
               plus  any  transmission  losses  resulting  on
               IPL*s  system  on account of the  transaction,
               and  plus any taxes incurred by IPL on account
               of the transaction.

     3.1.2   Except as otherwise provided in Subsection 3.1.3
     below,  when PSI is the supplying Party, IPL  shall  pay
     all   of   the  following  which  are  applicable   (the
     applicable  demand  charge rate per this  Subsection  is
     limited by Subsection 3.6):

          (a)  for  any week that Weekly Short-Term Power and
               Energy is reserved, a demand charge rate to be
               agreed  upon by the Parties at the  time  such
               Weekly   Short-Term  Power   and   Energy   is
               reserved.  Said demand charge rate shall be at
               a  rate  of up to $4,781 per megawatt reserved
               (such   charge  pertains  to  the   production
               component  only), except for each  day  (other
               than  Sunday)  during any part  of  which  the
               amount  of  such Weekly Short-Term  Power  and
               Energy  is  reduced by PSI, the  total  demand
               charge shall be reduced by one-sixth (1/6)  of
               said  agreed upon demand charge rate  (rounded
               to  the  nearest $0.10 per megawatt) for  each
               megawatt    of   the   reduction.     Non-firm
               transmission service per the provisions of the
               CINergy  Services, Inc., FERC Electric Tariff,
               Original Volume No. 3, Non-Firm Point-to-Point
               Transmission Service Standard Tariff - NFT (or
               any  successor transmission tariff of  similar
               service) must be obtained;

          (b)  for Weekly Short-Term Energy delivered that is
               generated  by  PSI,  an energy  charge  to  be
               agreed upon by the Parties at the time of  the
               transaction of up to 110% of the Out-Of-Pocket
               Cost    (such   cost   being   as    of    the
               interconnection point or points, as defined in
               Article  4 of the 1992 Agreement, taking  into
               account  electrical losses incurred  from  the
               source  or  sources  of  such  energy  to  the
               interconnection point or points) of  supplying
               such energy;

          (c)  for Weekly Short-Term Energy delivered that is
               purchased by PSI from a Third Party, an energy
               charge of 100% of the Out-Of-Pocket Cost  paid
               therefor  by PSI, plus $1.00 per megawatt-hour
               of  such  purchased energy (for  difficult  to
               quantify   energy-related  costs),  plus   any
               transmission losses resulting on the system of
               the CINergy Operating Companies on account  of
               the   transaction,  and  plus  any  regulatory
               commission charges and taxes incurred  by  PSI
               on account of the transaction.

     3.1.3   When  Weekly  Short-Term  Power  and  Energy  is
     purchased  by  the supplying Party from  a  Third  Party
     specifically  for  the  reserving Party,  the  reserving
     Party shall pay the supplying Party all of the following
     which are applicable:

     (a)  the  demand  charge paid therefor by the  supplying
          Party  to  the Third Party for such electric  power
          and energy;

     (b)  when IPL is the supplying Party:

          (1)  for  any week such Weekly Short-Term Power and
               Energy  is reserved, a demand charge rate  per
               kilowatt  to be agreed upon by the Parties  at
               the  time  such  Weekly Short-Term  Power  and
               Energy  is reserved, at a rate of up to  $0.29
               per kilowatt reserved (such charge pertains to
               the  reservation  of  transmission).   In  the
               event  the  amount  of such Weekly  Short-Term
               Power  and  Energy  is reduced  by  IPL,  said
               demand  charge shall be reduced by the sum  of
               (i)  one-sixth (1/6) of the said  agreed  upon
               weekly rate per kilowatt of the reduction  for
               each day (other than Sunday) during which such
               reduction   is   in  effect,  and   (ii)   the
               reduction,  if any, in the demand charge  paid
               by IPL to the Third Party;

     (c)  when PSI is the supplying Party:
          (1)  Non-firm   transmission   service   per    the
               provisions of the CINergy Services, Inc., FERC
               Electric Tariff, Original Volume No.  3,  Non-
               Firm  Transmission Service Standard  Tariff  -
               NFT  (or any successor transmission tariff  of
               similar  service)  must be  obtained.  In  the
               event  the  amount  of such Weekly  Short-Term
               Power  and  Energy  is reduced  by  PSI,  said
               demand  charge shall be reduced by the sum  of
               (i)  one-sixth (1/6) of the said  agreed  upon
               weekly rate per megawatt of the reduction  for
               each day (other than Sunday) during which such
               reduction   is   in  effect,  and   (ii)   the
               reduction,  if any, in the demand charge  paid
               by PSI to the Third Party;

          (2)  for each megawatt-hour purchased by PSI from a
               Third Party to supply Weekly Short-Term Energy
               delivered during such period, an energy charge
               of   100%  of  the  Out-Of-Pocket  Cost   paid
               therefor  by PSI, plus $1.00 per megawatt-hour
               (for   difficult  to  quantify  energy-related
               costs), plus any transmission losses resulting
               on   the   system  of  the  CINergy  Operating
               Companies  on account of the transaction,  and
               plus  any  regulatory commission  charges  and
               taxes  incurred  by  PSI  on  account  of  the
               transaction.

3.2  Daily Short-Term Power and Energy

     3.2.1   Except as otherwise provided in Subsection 3.2.3
     below,  when IPL is the supplying Party, PSI  shall  pay
     all   of   the  following  which  are  applicable   (the
     applicable  demand  charge rate per this  Subsection  is
     limited by Subsection 3.5):

     (a)  for  any day that Daily Short-Term Power and Energy
          is reserved, a demand charge rate to be agreed upon
          by  the  Parties at the time such Daily  Short-Term
          Power  and Energy is reserved, at a rate of  up  to
          $0.778  per kilowatt reserved, except, for any  day
          during  any part of which the amount of such  Daily
          Short-Term Power and Energy is reduced by IPL,  the
          agreed upon demand charge will only be paid for the
          power still available;

     (b)  for  Daily  Short-Term  Energy  delivered  that  is
          generated by IPL, an energy charge of up to 110% of
          the  Out-of-Pocket Cost (such cost being as of  the
          interconnection  point  or points,  as  defined  in
          Article  4  of  the  1992  Agreement,  taking  into
          account electrical losses incurred from the  source
          or  sources  of  such energy to the interconnection
          point or points) of supplying such energy;

     (c)  for  Daily  Short-Term  Energy  delivered  that  is
          purchased  by  IPL  from a Third Party,  an  energy
          charge  of  100%  of  the Out-of-Pocket  Cost  paid
          therefor  by  IPL, plus one (1) mill per  kilowatt-
          hour  of  such  purchased energy (for difficult  to
          quantify    energy-related   costs),    plus    any
          transmission  losses resulting on IPL*s  system  on
          account  of  the  transaction, and plus  any  taxes
          incurred by IPL on account of the transaction.

3.2.2   Except  as  otherwise provided  in  Subsection  3.2.3
below, when PSI is the supplying Party, IPL shall pay all  of
the  following  which are applicable (the  applicable  demand
charge  rates  per this Subsection are limited by  Subsection
3.6):

     (a)  for  any day that Daily Short-Term Power and Energy
          is reserved, a demand charge rate to be agreed upon
          by  the  Parties at the time such Daily  Short-Term
          Power  and Energy is reserved.  Said demand  charge
          rate  shall be at a rate of up to $797 per megawatt
          reserved  (such  charge pertains to the  production
          component only), the total charge in any week shall
          be  no  more  than the product of  $4,781  and  the
          greatest  number of megawatts reserved in  any  day
          during  said  week, except for any day  during  any
          part  of  which the amount of such Daily Short-Term
          Power and Energy is reduced by PSI, the agreed upon
          demand charge will only be paid for the power still
          available.  Non-firm transmission service  per  the
          provisions  of  the  CINergy Services,  Inc.,  FERC
          Electric  Tariff, Original Volume No.  3,  Non-Firm
          Point-to-Point Transmission Service Standard Tariff
          -  NFT  (or  any successor transmission  tariff  of
          similar service) must be obtained;

     (b)  for  Daily  Short-Term  Energy  delivered  that  is
          generated by PSI, an energy charge of up to 110% of
          the  Out-of-Pocket Cost (such cost being as of  the
          interconnection  point  or points,  as  defined  in
          Article  4  of  the  1992  Agreement,  taking  into
          account electrical losses incurred from the  source
          or  sources  of  such energy to the interconnection
          point or points) of supplying such energy;

     (c)  for  Daily  Short-Term  Energy  delivered  that  is
          purchased  by  PSI  from a Third Party,  an  energy
          charge  of  100%  of  the Out-of-Pocket  Cost  paid
          therefor  by  PSI, plus $1.00 per megawatt-hour  of
          such  purchased energy (for difficult  to  quantify
          energy-related costs), plus any transmission losses
          resulting  on  the system of the CINergy  Operating
          Companies on account of the transaction,  and  plus
          any   regulatory  commission  charges   and   taxes
          incurred by PSI on account of the transaction.

     3.2.3   When  Daily  Short-Term  Power  and  Energy   is
     purchased  by  the supplying Party from  a  Third  Party
     specifically  for  the  reserving Party,  the  reserving
     Party shall pay the supplying Party all of the following
     which are applicable:

     (a)  the  demand  charge paid therefor by the  supplying
          Party  to  the Third Party for such electric  power
          and energy;

     (b)  when IPL is the supplying Party:

          (1)   for  any day such Daily Short-Term Power  and
          Energy is reserved, a demand charge per kilowatt to
          be  agreed  upon by the Parties at  the  time  such
          Daily Short-Term Power and Energy is reserved, at a
          rate  of  up to $0.058 per kilowatt reserved  (such
          charge    pertains    to   the    reservation    of
          transmission).   In the event the  amount  of  such
          Daily  Short-Term Power and Energy  is  reduced  by
          IPL, said demand charge shall be reduced by the sum
          of (i) one-sixteenth (1/16) of the said agreed upon
          daily  rate per kilowatt of the reduction for  each
          hour  in any day during which such reduction is  in
          effect,  such  reduction not to exceed  the  agreed
          upon  demand  charge for such  day,  and  (ii)  the
          reduction, if any, in the demand charge paid by IPL
          to the Third Party;

          (2)  for each kilowatt-hour purchased by IPL from a
          Third  Party  to  supply  Daily  Short-Term  Energy
          delivered  during such period, an energy charge  of
          100%  of  the  Out-of-Pocket Cost paid therefor  by
          IPL,  plus  one  (1)  mill per  kilowatt-hour  (for
          difficult  to quantify energy-related costs),  plus
          any  transmission losses resulting on IPL*s  system
          on  account of the transaction, and plus any  taxes
          incurred by IPL on account of the transaction;
     (c)  when PSI is the supplying Party:

          (1)    Non-firm   transmission  service   per   the
          provisions  of  the  CINergy Services,  Inc.,  FERC
          Electric  Tariff, Original Volume No.  3,  Non-Firm
          Transmission Service Standard Tariff - NFT (or  any
          successor  transmission tariff of similar  service)
          must  be obtained. In the event the amount of  such
          Daily  Short-Term Power and Energy  is  reduced  by
          PSI, said demand charge shall be reduced by the sum
          of (i) one-sixteenth (1/16) of the said agreed upon
          daily  rate per megawatt of the reduction for  each
          hour in any day during which any such reduction  is
          in  effect, such reduction not to exceed the agreed
          upon  demand  charge for such  day,  and  (ii)  the
          reduction, if any in the demand charge paid by  PSI
          to the Third Party;
          (2)  for each megawatt-hour purchased by PSI from a
          Third  Party  to  supply  Daily  Short-Term  Energy
          delivered  during such period, an energy charge  of
          100%  of  the  Out-of-Pocket Cost paid therefor  by
          PSI, plus $1.00 per megawatt-hour (for difficult to
          quantify    energy-related   costs),    plus    any
          transmission losses resulting on the system of  the
          CINergy  Operating  Companies  on  account  of  the
          transaction,  and  plus  any regulatory  commission
          charges and taxes incurred by PSI on account of the
          transaction.

3.3   Notwithstanding  the rates stated  in  the  Subsections
3.1.1,  3.1.3,  3.2.1  and  3.2.3  above,  when  IPL  is  the
supplying Party, the sum of the demand and energy charges for
each  specific reservation made pursuant to Section 2 of this
Service Schedule C shall not:

     (1)  exceed the total of:

            (i)   the  product  of  the number  of  kilowatts
          reserved  for  such reservation times  the  maximum
          Weekly   or  Daily  demand  charge,  whichever   is
          applicable,  specified above in Subsections  3.1.1,
          3.1.3, 3.2.1 and 3.2.3, as appropriate; and

          (ii)   the  product of the number of kilowatt-hours
          supplied  for such reservation times  110%  of  the
          average  cost per kilowatt-hour of energy generated
          by  IPL's  Petersburg  Unit  No.  4  for  the  last
          preceding month during which it was run; or

     (2)   be less than 110% of the total Out-Of-Pocket  Cost
     of supplying the Short Term Energy for such reservation.

3.4   Notwithstanding the rates stated in Subsections  3.1.2,
3.1.3,  3.2.2 and 3.2.3 above, when PSI and CINergy  Services
are  the  supplying Party, the sum of the demand  and  energy
charges  for  each  specific  reservation  made  pursuant  to
Section 2 of this Service Schedule C shall not:

     (1)  exceed the total of:

          (i) the product of the number of megawatts reserved
          for  such  reservation times the maximum Weekly  or
          Daily   demand  charge,  whichever  is  applicable,
          specified above in Subsections 3.1.2, 3.1.3,  3.2.2
          and 3.2.3, as appropriate, and plus

          (ii)  the  product of the number of  megawatt-hours
          supplied  for such reservation times  110%  of  the
          average  cost per megawatt-hour of energy generated
          by the CINergy Operating Companies* Zimmer Unit No.
          1  and  Gibson Unit No. 5 for the preceding  month;
          nor

     (2)   be  less than 100% of the Out-Of-Pocket  Costs  of
     supplying the Short Term Energy for such reservation.

3.5   The  aggregate instant total capacity of all IPL  sales
under  this and other Service Schedules which are a  part  of
this  and  other IPL Agreements, for which the rates  charged
have been supported on the basis that total revenues will not
exceed  the  costs of Petersburg Unit No. 4,  is  limited  to
515MW.

3.6   The  total power of all sales by the CINergy  Operating
Companies   and  CINergy  Services  under  this   and   other
agreements  of  the CINergy Operating Companies  and  CINergy
Services,  for  which  the  agreed  upon  demand  charge   is
determined based on Zimmer Unit No. 1 and Gibson Unit No.  5,
is  limited  to 925 MWs (CINergy Operating Companies*  Zimmer
Unit  No. 1 Net Demonstrated Capability of 612 MWs and Gibson
Unit  No.  5  Net Demonstrated Capability of 313 MWs)  on  an
hourly basis.  For sales in excess of the power limitation of
925  MWs  noted above, the rate shall consist  of  an  energy
charge  of  up  to 110% of Out-of-Pocket Cost  and  a  demand
charge  of  up to $1,252 per megawatt per week  or  a  demand
charge  of up to $209 per megawatt per day, the total  charge
in  any  one week shall be no more than the product of $1,252
and  the  greatest number of megawatts reserved in  any  hour
during  said  week  (such charge pertains to  the  production
component  only).   Non-firm  transmission  service  per  the
provisions  of  the  CINergy Services,  Inc.,  FERC  Electric
Tariff,   Original  Volume  No.  3,  Non-Firm  Point-to-Point
Transmission Service Standard Tariff - NFT (or any  successor
transmission tariff of similar service) must be obtained; but
in no event shall the total revenue (energy charge and demand
charge combined) be less than 100% of the Out-of-Pocket Costs
of  supplying  the  Short-Term Energy for  such  reservation.
Notwithstanding all previous Subsections, when power is  sold
under  both this Subsection and Subsection 3.1.2 in any week,
the  total demand charge will be the weighted average  demand
charges  in  this  Subsection  and  Subsection  3.1.2.   Such
weighting  will  be developed by adding the number  of  hours
that  power  was  provided under this  Subsection  times  the
demand  charge under this Subsection and the number of  hours
that  power  was  provided under Subsection 3.1.2  times  the
demand  charge  in  Subsection 3.1.2,  with  such  sum  being
divided by the total number of hours in the week.  Also, when
power is sold under both this Subsection and Subsection 3.2.2
in  any  day,  the total demand charge will be  the  weighted
average  demand  charges  in this Subsection  and  Subsection
3.2.2.  Such weighting will be developed by adding the number
of  hours that power was provided under this Subsection times
the  demand  charge under this Subsection and the  number  of
hours  that  power was provided under Subsection 3.2.2  times
the  demand charge in Subsection 3.2.2, with such  sum  being
divided by the total number of hours in the day.

               EXHIBIT IV
               (SECOND REVISION)

                     SERVICE SCHEDULE D

   CARMEL SOUTHEAST TAP NETWORK POWER AND ENERGY TRANSFER

SECTION 1 - DURATION

1.1   This  Service Schedule, being a part of and  under  the
Interconnection Agreement (referred to herein  as  the  "1992
Agreement")  dated  as  of May 1, 1992  between  Indianapolis
Power  &  Light  Company (hereinafter called "IPL")  and  PSI
Energy,  Inc.,  formerly  named  Public  Service  Company  of
Indiana,   Inc.,  (hereinafter  called  "PSI")  and   CINergy
Services, Inc. (hereinafter called "CINergy Services"), shall
become  effective as of the earlier date of either  September
1,  1995 or the effective date of the Third Amendment,  dated
June  30,  1995, and shall continue in effect through  August
31,  1996,  unless extended as provided in Section 6  hereof.
IPL,  PSI  and  CINergy  Services are  sometimes  hereinafter
referred  to  individually  as  "Party"  or  collectively  as
"Parties" where appropriate.

SECTION 2 - FACILITIES TO BE PROVIDED

2.1  PSI shall provide, install, operate and maintain, at its
own  expense, during the term of this Service Schedule  D  as
defined in Section 6 hereof, the following facilities:
     (i)  At its Carmel Southeast Substation - a 138,000 volt
three-phase  interrupting device, a  24/40  MVA  transformer,
12,470  volt  metering  equipment,  relaying,  switching,   a
supervisory  control  remote terminal unit,  a  communication
circuit  from  the  supervisory unit to IPL*s  Load  Dispatch
Office  and  appurtenant equipment, all  of  which  shall  be
subject  to  the  prior  approval  of  IPL.   PSI  shall   be
responsible  for  installing,  owning  and  maintaining   all
necessary  protection equipment required by  IPL  to  protect
IPL*s  facilities associated with Carmel Tap.   PSI*s  remote
terminal  unit shall provide data acquisition, remote  status
and  control of the load and allow PSI to provide  real  time
dispatch  of their generation to their load as well  as  load
control  while IPL will be provided real time breaker  status
and load data.
     (ii) A  138,000  volt  transmission line extending  from
          Carmel  Southeast Substation to Transmission  Tower
          Number  7 (Map Section 173A) on IPL's 138,000  volt
          North-River   Road   (132-57)  transmission   line,
          together with a 138,000 volt tap at such tower,  to
          be known as the Carmel Tap Point.

2.2   IPL  shall provide, install, operate and  maintain,  as
direct  assignment facilities at the sole benefit and expense
of PSI, during the term of the Carmel Tap Point as defined in
Section 6 hereof, a 138,000 volt two-way switching point with
supervisory   controlled  138,000  volt   line   interrupting
disconnect  switches  and associated  facilities  such  as  a
switch  tower,  supervisory terminal unit  and  communication
circuit at the Carmel Tap Point.

SECTION 3 - SERVICES TO BE RENDERED

3.1   The Parties hereto mutually agree that their respective
radial  distribution systems will not be operated in parallel
through  the  Carmel Tap Point.  Electric energy supplied  by
IPL  to  PSI  at  the  Carmel Tap Point will  be  treated  as
capacity  and  energy simultaneously transferred  into  IPL's
system by PSI through the other interconnection points of the
Parties  and  will  be  used  only  to  supply  the  ultimate
consumers  of PSI who are or may be served from PSI's  Carmel
Southeast  Substation.  Any capacity or energy  delivered  by
IPL   to   PSI  through  the  Carmel  Tap  Point   shall   be
simultaneously  supplied by PSI to IPL  through  any  of  the
interconnection points of the Parties.  PSI*s supplied energy
shall include an adder of approximately 3%-5% to the capacity
and  energy  delivered to the Carmel Tap by IPL to compensate
IPL  for capacity and energy losses occurring on IPL*s system
and  PSI*s  tapped  transmission line  and  transformer  bank
(metered at secondary voltage) due to the transfer of  energy
to the Carmel Tap Point.

3.2  IPL shall provide PSI with the following services:

     1)   Firm,  network  transmission  service  including  a
          capacity reservation (34,500 volt, 138,000 volt and
          above) of up to and including 20 MW*s (measured  at
          the other IPL/PSI interconnection points as defined
          in   the   1992   Agreement).  Said   service   and
          reservation  shall be planned for and  provided  on
          the  same basis as IPL*s firm native load customers
          only  during  the term of this service schedule  as
          set forth in Section 6 herein of this Agreement.

     2)   Non-firm transmission service (34,500 volt, 138,000
          volt  and  above)  up  to  and  including  30  MW*s
          (measured  at  the  other  IPL/PSI  interconnection
          points  in the 1992 Agreement) in addition  to  the
          firm  transmission listed in Point 1  above.   Said
          non-firm  service  shall be  on  an  as  available,
          interruptible basis when requested by PSI.

Upon  IPL*s  request,  PSI shall immediately  curtail  and/or
interrupt  its  firm load served by the 20  MW  firm  network
transmission  and reservation service on the  same  basis  as
IPL*s  firm  native load customers.  If PSI*s demand  exceeds
their  reservation (herein called "excess loading") PSI shall
demonstrate  that all such demand exceeding their reservation
is  1) immediately interruptible by contract or 2) that  such
excess  loading  occurred due to emergency switching  lasting
less  than  a  total  of two (2) weeks within  any  six-month
period.   Otherwise such excess loading shall be  treated  as
having automatically increased PSI*s reservation, for billing
purposes  only, until IPL is satisfied PSI has taken  actions
to  permanently  eliminate such excess  loading.   IPL  shall
coordinate  non-emergency maintenance outages  with  PSI  and
provide  a  minimum notification by 12:00  noon  of  the  day
before the scheduled outage.

3.3   IPL  and  PSI  shall periodically  conduct  independent
and/or  joint  studies of their future systems to  serve  the
Indianapolis northeast metropolitan area.  PSI shall annually
update and provide IPL with their ten year demand projections
for  the Carmel Tap Point.  If such studies indicate problems
due  to  PSI*s  20  MW reservation or projected  increase  in
reservation, then IPL and PSI shall jointly or independently,
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 in accordance with IPL standards.

IPL*s studies of this service cover the first five years  and
identified facilities during that period which may need to be
upgraded   if   area  demand  grows  faster  than   presently
projected.  If facility upgrades are required, PSI shall  pay
annual  carrying  costs on a monthly basis  during  the  time
period from the in-service date of the facilities until IPL*s
area  load increases by the amount of PSI*s 20 MW reservation
plus  actual  and projected increases in reservation  (herein
called  "period  of advancement") after which  the  remaining
costs  shall  be rolled into IPL*s rate analysis.   Any  time
PSI*s  reservation, as determined under 3.2  above,  requires
IPL  to install facilities in advance of its need, PSI  shall
pay annual carrying cost on such facilities during the period
of  advancement.  Increased reservations beyond 20 MWs  shall
be treated as interruptible until all necessary facilities to
reliably accommodate these loads are placed in service.   IPL
will not increase or upgrade the capacity of its existing  or
planned  transmission facilities in order to provide  service
under this Agreement if doing so would unduly 1) impair IPL*s
system  reliability or 2) jeopardize the benefits of  service
or  3)  increase  the cost of service to  IPL*s  Native  Load
Customers  and other customers to whom IPL has a pre-existing
contractual obligation.

In  the  event PSI does not elect to continue its reservation
after the term of this Service Schedule, PSI shall pay 1) the
stranded cost of all IPL*s facilities directly assignable  to
providing  firm  service  for PSI*s reservation  and  2)  the
remaining  annual  cost  on a monthly  basis  of  all  system
improvements from the termination date until IPL*s area  load
increase  equals  the  amount of PSI*s reservation.   In  the
event  IPL  can*t  obtain regulatory approvals  for  facility
modifications  needed  to increases PSI*s  reservation,  then
firm  service  shall not be provided for the  amount  of  the
increased service reservation.

3.4  PSI shall provide for ancillary services such as dynamic
reactive  var/voltage support, all generation reserves,  real
time generation dispatch, load following and dispatch control
services  needed to support the operation of the  Carmel  Tap
Point.

3.5   IPL  shall file with the FERC an amendment  to  Service
Schedule D for all direct assignment facilities (not  covered
in  Section  2.2) to be provided for PSI by  IPL  under  this
Service  Schedule  and  for  all costs  for  advanced  system
improvements during the "period of advancement"  due  to  the
PSI  transmission reservation provided under Service Schedule
D.   FERC*s failure to accept the cost assignments for either
direct   assignment   facilities   and/or   advanced   system
improvements due to the PSI network load service provided  in
this  Service  Schedule D shall result in 1) IPL  terminating
its  obligation  to  provide and plan for PSI*s  transmission
reservation as covered in Section 3.2 and Section  3.3  above
or  2)  PSI may elect to reduce the level and/or firmness  of
PSI*s  transmission  reservation so  that  additional  direct
assignment  facilities  and/or  system  improvement  facility
advancements won*t be needed or 3) PSI may elect to terminate
service provided hereunder provided that upon termination  of
this  Service Schedule D by PSI, PSI shall remain responsible
for  paying IPL all costs remaining for all direct assignment
facilities  provided by IPL and all remaining costs  for  all
advanced  system improvements attributed to  PSI  during  the
period  of advancement where said facilities have been  filed
with and accepted by the FERC including the direct assignment
facilities  provided  initially  under  Section   2.2.    The
stranded  cost  of the direct assignment facilities  provided
under  Section 2.2 shall be calculated and marked up for  tax
effects  as  shown in Attachment 1 and shall be paid  by  PSI
within 30 days of receipt of the bill from IPL.
SECTION 4 - DEVIATIONS IN DELIVERIES AT CARMEL TAP POINT

4.1   The  Parties agree that with respect to the Carmel  Tap
Point, PSI shall simultaneously supply (including adjustments
for  losses)  to IPL from PSI*s other interconnection  points
with  IPL  the capacity and energy delivered to PSI  by  IPL.
The  Parties  recognize,  however, that  despite  their  best
efforts  to  simultaneously supply and deliver  capacity  and
energy  (including adjustments for losses) deviations between
actual  and  scheduled energy transfers may occur.   Electric
energy resulting from such deviations shall, at the option of
IPL, be settled for either by return of equivalent energy  or
by  payment of Out-Of-Pocket Costs. If equivalent  energy  is
returned,  it shall be returned at times when the  generating
costs of IPL are equivalent to the generating costs of IPL at
the  time  of  the  deviations or,  if  IPL  elects  to  have
equivalent  energy  returned under different  conditions,  it
shall  be  returned  in such amounts, to be  mutually  agreed
upon,   as   will  compensate  IPL  for  the  difference   in
conditions.

IPL,  at its option, may elect to bill for such Out-Of-Pocket
Costs, plus ten percent of such cost, for any energy supplied
over  and  above that scheduled by PSI for any hour or  hours
during the billing period.  Such costs shall be determined at
the Carmel Tap Point by taking into account electrical losses
incurred  from the source or sources of such energy  to  said
Tap Point.

4.2   If IPL elects to bill for any energy supplied over  and
above that scheduled by PSI for any hour or hours during  the
billing period where the energy was supplied by a Third Party
then  in accordance with the FERC Order 84 the maximum amount
to  be  billed by IPL to PSI shall be 100% of the Third Party
demand  and  energy charge plus 1 mill/kwhr (the 1  mill/kwhr
adder  is applicable only to transactions with a duration  of
less  than one year) plus IPL*s network transmission rate  as
accepted by the FERC under this Service Schedule D.

SECTION 5 - COMPENSATION

5.1   FIRM  SERVICE  - Electric power measured  in  kilowatts
supplied  by PSI and delivered at the Carmel Tap Point  under
the 1992 Agreement by IPL to PSI shall be billed on a monthly
basis the annual cost of IPL*s transmission system multiplied
by  the  ratio  of the sum of PSI*s twelve 20 MW reservations
divided  by  IPL*s  annual system peak  demand  which  equals
$283,200  annually as calculated in the cost support Appendix
A.   The loss factors consisting of a 3-5% adder, as noted in
Section  3.1  hereof, shall include PSI*s radial transmission
line  and  transformer bank associated with  the  Carmel  Tap
Point  and  IPL*s 34,500 volt and above transmission  system.
The loss factors shall include PSI*s radial transmission line
and transformer bank associated with the Carmel Tap Point and
IPL*s  transmission  system.   The  loss  factors  shall   be
determined  by  the annual transmission system  loss  studies
performed  by  IPL  and  PSI.   Also,  increases   in   PSI*s
reservation shall be billed by using the same methodology.
5.2   NON-FIRM SERVICE - Electric power measured in kilowatts
supplied  by PSI and delivered at the Carmel Tap Point  under
the 1992 Agreement by IPL to PSI shall be billed at $1.18 per
kilowatt-month plus $0.01 per kilowatt-month for IPL dispatch
control.  This demand charge for non-firm service applies  to
usage above PSI*s firm service reservation and shall be based
upon  the  difference in maximum hourly demand  in  kilowatts
measured  and the amount of PSI*s reservation in the calendar
month  of  billing.  The loss factors consisting  of  a  3-5%
adder,  as  noted in Section 3.1 hereof, shall include  PSI*s
radial transmission line and transformer bank associated with
the  Carmel  Tap  Point  and  IPL*s  34,500  volt  and  above
transmission system.  The loss factors shall be determined by
the  annual transmission system loss studies performed by IPL
and PSI.

5.3   DIRECT ASSIGNMENT FACILITIES - PSI shall pay IPL  on  a
monthly  basis  IPL*s annual charges on the  total  installed
cost   of  the  facilities  provided  in  Section  2.2  above
multiplied by IPL*s annual carrying charges as calculated  in
Attachment 1 and revisions will be filed with the FERC.

SECTION 6 - TERM OF AGREEMENT

6.1   This  Service Schedule shall terminate August 31,  1996
unless PSI notifies IPL at least six (6) months prior to such
termination date that it desires to continue service  to  the
Carmel  Tap  Point;  provided  however,  that  any  continued
service  is  subject  to  such terms and  conditions  as  are
mutually agreed to by the Parties.

Fourth Amendment

                         June 26, 1996

Mr. Ron C. Snead
Cinergy Corporation
139 East Fourth Street
Cincinnati, OH  45201

  Re:  IPL/PSI Interconnection Agreement - Service Schedule D

Dear Ron:

This is to confirm the phone conversation on June 10, 1996,
in which you and Jerry Fohey, Director, Electric System
Planning, discussed extending our agreement regarding
transmission service IPL provides PSI Energy at the Carmel
Southeast Tap by one year to and including August 31, 1997.
You indicated that PSI Energy was agreeable to so extending
Service Schedule D (Carmel Southeast Tap Network Power and
Energy Transfer).

Please confirm by signature below, Cinergy's agreement that
the existing Service Schedule D, under which IPL currently
provides service to PSI Energy at the Carmel Southeast Tap,
will be extended by one year to and including August 31,
1997, with the same rates, terms and conditions.  Further,
Cinergy and IPL agree that PSI Energy also has the option to
take transmission service for the Carmel Southeast Tap under
any open access transmission tariffs that may be filed by IPL
and which become effective after the date of this letter
agreement.

Three original copies of this letter are provided for your
signature.  Please return two signed copies to IPL.

                              Regards,

                              /s/ John C. Berlier, Jr.

                              John C. Berlier, Jr.
                              Vice President - Resource
Planning & Rates

Enclosures

ACKNOWLEDGEMENT

By: /s/ John C. Procario

Title:  General Manager

Company:   Cinergy

Fifth Amendment

                        June 10, 1997

Mr. Ron C. Snead
Cinergy Corporation
139 East Fourth Street
Cincinnati, OH  45201

  Re:  IPL/PSI Interconnection Agreement - Service Schedule D

Dear Ron:

This letter seeks to extend our existing agreement regarding
transmission service IPL provides PSI Energy at the Carmel
Southeast Tap, which expires August 31.  IPL proposes to
extend Service Schedule D (Carmel Southeast Tap Network Power
and Energy Transfer), a part of the existing interconnection
agreement between IPL and Cinergy, dated June 30, 1995, by
one year, to and including August 31, 1998.

Please confirm by signature below, Cinergy's agreement that
the existing Service Schedule D, under which IPL currently
provides service to PSI Energy at the Carmel Southeast Tap,
will be extended by one year to and including August 31,
1998, with the same rates, terms and conditions.  Further,
Cinergy and IPL agree that PSI Energy also has the option to
take transmission service for the Carmel Southeast Tap under
any open access transmission tariffs that may be filed by IPL
and which become effective after the date of this letter
agreement.

Three original copies of this letter are provided for your
signature.  Please return one signed original copy to me and
retain one copy for your files.

                              Regards,

                              /s/ John C. Berlier

                              John C. Berlier
                              Vice President
                              Resource Planning & Rates

Enclosures

ACKNOWLEDGEMENT

By: /s/ John C. Procario

Title:  Vice President
     Electric System Operations

Company:   Cinergy Corp.

                       SIXTH AMENDMENT
                           TO THE
                  INTERCONNECTION AGREEMENT
                            AMONG
             INDIANAPOLIS POWER & LIGHT COMPANY
                      PSI ENERGY, INC.
                 AND CINERGY SERVICES, INC.

0.01 THIS SIXTH AMENDMENT, dated on the 16th day of December,
1997, among INDIANAPOLIS POWER & LIGHT COMPANY ("IPL"), PSI
ENERGY ("PSI"), INC., and CINERGY SERVICES, INC. ("Cinergy
Services").  IPL, PSI, and Cinergy Services are referred to
individually as "Party" and collectively as "Parties" where
appropriate.

                         WITNESSETH:

0.02 WHEREAS, There is now in force and effect between IPL,
PSI, and Cinergy Services an Interconnection Agreement, dated
as of May 1, 1992 (the "1992 Agreement"); and

0.03 WHEREAS, the Parties desire to modify the 1992
Agreement, and

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

1.01 The following provisions of the 1992 Agreement are
modified as follows:

     1.01.1     Section 4.01 of the 1992 Agreement shall read
as follows:

     "4.01.  Delivery Points.  All electric energy
     delivered under the 1992 Agreement shall be of the
     character commonly known as three-phase sixty Hertz
     energy, and shall be delivered at the
     Interconnection Points specified under Section 1.01
     hereof, at a nominal voltage of 138,000 volts at
     the Five Points and Centerton Interconnection
     Points, at the 138 kV Petersburg Interconnection
     Point, and at the Carmel Tap Point; and at a
     nominal voltage of 345,000 volts at the Whitestown
     and Gwynneville Interconnection Points, and at the
     345 kV Petersburg Interconnection Point; and at
     such other points and voltages as hereafter may be
     agreed upon by the Parties pursuant to Section 1.02
     hereof.  In addition to the interconnection points
     provided in Sections 1.01 and 1.02, PSI may request
     IPL deliver electric energy under the 1992
     Agreement at interconnection points IPL may have
     with third parties (hereinafter referred to as
     "Alternate Delivery Points")."

     1.01.2     Section 4.03 of the 1992 Agreement shall read
as follows:

     "4.03.  Metering Points.  Electric power and energy
     supplied and delivered under the 1992 Agreement
     shall be measured by suitable metering equipment
     which shall be provided, owned and maintained by
     PSI or IPL as designated below at the following
     metering points:

          (i)  138,000 volt metering equipment installed
               by PSI at the Five Points Substation;
               138,000 volt metering equipment installed
               by PSI at the Centerton Substation;
               138,000 and 345,000 volt metering
               equipment installed by IPL at the
               Petersburg Station; 345,000 volt metering
               equipment installed by IPL at its
               Sunnyside Substation and at PSI's
               Gwynneville and Whitestown Substations;
               and 12.47 kV metering equipment installed
               by PSI at its Carmel Southeast
               Substation, and

          (ii) At such other locations as hereafter may
               be agreed upon by the Parties pursuant to
               Section 1.02 hereof.

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

     1.01.3     Section 6.03 of the 1992 Agreement shall read
as follows:

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

     1.01.4     Section 7.01 of the 1992 Agreement shall read
as follows:

     "7.01.  Operating Committee Organization and
     Duties.  To coordinate the operation of their
     respective generation,  transmission, and
     substation facilities in order that the benefits of
     the 1992 Agreement may be realized by the Parties
     to the fullest practicable extent, the Parties
     shall establish a committee of authorized
     representatives to be known as the Operating
     Committee.  Each of the Parties shall designate in
     writing delivered to the other Party, the person
     who is to act as its authorized representative (the
     "OC Representative") on said committee (and the
     person or persons who may serve as Alternate
     whenever the OC Representative is unable to act).
     The OC Representative and Alternate or Alternates
     shall each be persons familiar with the generation,
     transmission, and substation facilitates of the
     system of the Party he represents, and each shall
     be fully authorized (i) to cooperate with the other
     OC Representative (or Alternates) and (ii) as the
     need arises and subject to the declared intentions
     of the Parties as herein set forth and to the terms
     hereof and the terms of any other agreements then
     in effect between the Parties, to determine and
     agree from time to time upon the following:

          (i)  All matters pertaining to the
               coordination of maintenance of the
               generation and transmission facilities of
               the Parties.

          (ii) 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.

          (iii)     Such other matters not specifically
               provided for herein upon which
               cooperation, coordination and agreement
               as to quantity, time, method, terms and
               conditions are necessary, in order that
               the operation of the respective systems
               of the Parties may be coordinated to the
               end that the potential benefits
               anticipated by the Parties will be
               realized to the fullest extent
               practicable.

          (iv) All matters pertaining to the delivery of
               electric power and energy pursuant to the
               1992 Agreement."

     1.01.5     Section 8.02 of the 1992 Agreement shall read
as follows:

     "8.02.  Relative Responsibilities.  Each Party
     assumes all responsibility for receipt and delivery
     of electricity on its system to and from the Points
     of Interconnection specified in Section 1.01 hereof
     or agreed upon pursuant to Section 1.02 hereof or
     as requested by PSI pursuant to Section 4.01.
     Neither Party assumes any responsibility with
     respect to the construction, installation,
     maintenance or operation of the system of the other
     Party or of the systems of third parties, in whole
     or in part.  In no event shall one Party be liable
     to the other Party for damage or injury to any
     person or property, whatsoever, arising, accruing
     or resulting from, in any manner, the receiving,
     transmission, control, use, application or
     distribution of said electric power and energy.
     Each Party shall use reasonable diligence to
     maintain its facilities in proper and serviceable
     condition, and shall take reasonable steps and
     precautions for maintaining the services agreed to
     be provided and received under the 1992 Agreement.
     Each Party shall be responsible for its own
     compliance with all applicable environmental
     regulations and shall bear all costs arising from
     its failure to comply with such environmental
     regulations."

2.01 This Sixth Amendment shall be effective as of February
15, 1998 or as of the date it becomes effective under
applicable regulations or orders of FERC, whichever is later.

3.01 This Sixth Amendment is made subject to the jurisdiction
of any governmental authorities having jurisdiction in the
premises.

IN WITNESS WHEREOF, the Parties have caused this Sixth
Amendment to the 1992 Agreement to be executed by their
respective duly authorized officers, as of the day, month and
year first above-written.

INDIANAPOLIS POWER & LIGHT COMPANY

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

CINERGY SERVICES, INC.

By /s/ Michael E. Martin
       Michael E. Martin, Vice President

PSI ENERGY, INC.

By /s/ John Mutz
       John Mutz, President

Seventh Amendment

                        June 11, 1998

Mr. Ron C. Snead
Cinergy Corporation
139 East Fourth St.
Cincinnati, OH 45201

Re:  IPL/PSI Interconnection Agreement - Service Schedule D

Dear Mr. Snead:

This letter seeks to extend our existing agreement regarding
transmission service IPL provides PSI Energy at the Carmel
Southeast Tap, which expires August 31.  IPL proposes to
extend Service Schedule D (Carmel Southeast Tap Network Power
and Energy Transfer), a part of the existing interconnection
agreement between IPL and Cinergy, dated June 30, 1995, by
one year, to include August 31, 1999.

Please confirm by signature below, Cinergy's agreement that
the existing Service Schedule D, under which IPL currently
provides service to PSI at the Carmel Southeast Tap, will be
extended by one year to and including August 31, 1999, with
the same rates, terms and conditions.  Further, Cinergy and
IPL agree that PSI Energy also has the option to take
transmission service for Carmel Southeast Tap under any open
access transmission tariffs that may be filed by IPL and
which become effective after the date of this letter
agreement.

Two original copies of this letter are provided for your
signature.  Please return one signed original copy to me and
retain one copy for your files.

                              Regards,

                              /s/ Michael G. Banta
                              Michael G. Banta,
                              Vice President
                              and Assistant General Counsel

ACKNOWLEDGEMENT

By: /s/ John C. Procario
        John C. Procario

Title: Vice President

Company: Cinergy Services, Inc., acting as agent for and on behalf of
         PSI Energy, Inc.

Eighth Amendment

                        June 18, 1999

Mr. Ron Snead
Cinergy Corporation
139 East Fourth Street
Cincinnati, OH  45201

RE:  IPL/PSI INTERCONNECTION AGREEMENT - Service Schedule D

Dear Mr. Snead:

This letter seeks to extend our existing agreement regarding
transmission service IPL provides PSI Energy at the Carmel
Southeast Tap, which expires August 31, 1999.  IPL proposes to
extend Service Schedule D (Carmel Southeast Tap Network Power
and Energy Transfer), a part of the existing interconnection
agreement between IPL and Cinergy, dated June 30, 1995, by one
year, to include August 31, 2000.

Please confirm by signature below, Cinergy's agreement that the
existing Service Schedule D, under which IPL currently provides
service to PSI at the Carmel Southeast Tap, will be extended by
one year to and including August 31, 2000, with the same rates,
terms and conditions.  Further, Cinergy and IPL agree that PSI
Energy also has the option to take transmission service for
Carmel Southeast Tap under any open access transmission tariffs
that may be filed by IPL and which become effective after the
date of this letter agreement.

Two original copies of this letter are provided for your signature.
Please return one signed original copy to me and retain one for
your files.

                        Respectfully,

                        /s/ Ralph E. Canter
                        Ralph E. Canter,
                        Senior Vice President,
                        Customer Services
REC:rly

ACKNOWLEDGEMENT

By: /s/ John C. Procario
        John C. Procario

Title: Vice President

Company: Cinergy Services, Inc., acting as agent for and on behalf of
         PSI Energy, Inc.

                         NINTH AMENDMENT

                             TO THE

                    INTERCONNECTION AGREEMENT

                              AMONG

               INDIANAPOLIS POWER & LIGHT COMPANY

                        PSI ENERGY, INC.

                   AND CINERGY SERVICES, INC.

                         Effective as of

                         NINTH AMENDMENT
                             TO THE
                    INTERCONNECTION AGREEMENT
                              AMONG
               INDIANAPOLIS POWER & LIGHT COMPANY
                        PSI ENERGY, INC.
                   AND CINERGY SERVICES, INC.

     Pursuant to Order No. 888, Indianapolis Power & Light
Company (IPL) restates the rates for service provided by IPL
under the Interconnection Agreement as the following:

1)   The Interconnection Agreement provides for IPL sales of
capacity and energy under service schedules described as:

          Service Schedule A - Emergency Service
          Service Schedule B - Interchange Energy
          Service Schedule C - Short Term Power and Energy

2)   The wholesale generation component of the rate applicable to
service under these Service Schedules A through D shall be the
bundled rate minus the transmission and ancillary service rates
provided in Section 3 of this Amendment.

     Where the Service Schedules provide for compensation to IPL
in the form of equivalent energy, such return of equivalent
energy shall be made of the generation component, with the
transmission and ancillary services related to such return of
equivalent energy arranged pursuant to and assessed as provided
in Section 3 of this Amendment.

3)   Transmission and ancillary services necessary to effectuate
sales under the Interconnection Agreement shall be arranged by
IPL under and subject to the rates, terms, and conditions of
IPL's Open Access Transmission Tariff.  The rates for point-to-
point transmission service and the two ancillary services
necessary to effectuate such sales are provided below.  IPL will
provide either Short-Term Firm Point-to-Point or Non-Firm Point-
to-Point transmission service and ancillary services for
Scheduling, System Control and Dispatch (Scheduling Service), and
Reactive Supply and Voltage Control from Generation Sources
(Reactive Supply Service).  IPL will not provide Regulation and
Frequency Response Service, Energy Imbalance Service, Operating
Reserve-Spinning Reserve Service, or Operating Reserve-
Supplemental Reserve Service in connection with sales under the
Interconnection Agreement, and there will be no charge for such
services in connection with the sales under the Interconnection
Agreement.

     The rates for both Short-Term Firm and Non-Firm Point-to-
Point Service are:  $ 930.00/MW of reserved capacity for monthly
service, $215.00/MW of reserved capacity for weekly service,
$43.00/MW of reserved capacity for on-peak daily service, and
$30.70/MW of reserved capacity for off-peak daily service, with
the daily service capacity charges capped at the weekly rates.
Non-Firm Point-to-Point service is available on an hourly basis
at $2.69/MW for on-peak hours and $1.28/MWH for off-peak hours
with the maximum hourly charges capped at the daily rates.

     For Scheduling Service, the monthly rate is $10.00/MW of
reservation, the weekly rate is $3.00/MW, the daily rate is
$0.60/MW, and the hourly rate is $0.04/MWH.  The sum of the
hourly charges is capped at the daily rate, the sum of the daily
charges is capped at the weekly rate, and the sum of the weekly
charges is capped at the monthly rate.

     For Reactive Supply Service, the monthly rate is $110.00/MW
of reservation, the weekly rate is $25.00/MW, the daily rate is
$5.00/MW, and the hourly rate is $0.31/MWH.  The sum of the
hourly charges is capped at the daily rate, the sum of the daily
charges is capped at the weekly rate, and the sum of the weekly
charges is capped at the monthly rate.

     If transmission and ancillary services are obtained by PSI
Energy and Cinergy Serivces, Inc. under Indianapolis Power &
Light Company's Open Access Transmission Tariff, there will be no
charge related to transmission and ancillary service assessed
under the Interconnection Agreement.  A service agreement under
Indianapolis Power & Light Company's Open Access Transmission
Tariff is on file as of the effective date of this Ninth
Amendment to govern service to PSI Energy and Cinergy Serivces,
Inc. for this power sale, and charges for transmission and
ancillary services for this power sale will be assessed to PSI
Energy and Cinergy Serivces, Inc. under the Open Access
Transmission Tariff.

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