Document:

EXHIBIT 10.5

                 INTERCONNECTION AGREEMENT

                          BETWEEN

             INDIANAPOLIS POWER & LIGHT COMPANY

                            AND

           WABASH VALLEY POWER ASSOCIATION, INC.

                            FOR

      INTERCHANGE WHOLESALE SALES AND PURCHASES UNDER

            EMERGENCY SERVICE, ENERGY TRANSFER,

            INTERCHANGE POWER, SHORT-TERM POWER,

               LIMITED TERM POWER (FIRM) AND

                 DIVERSITY POWER SCHEDULES

0.01 This Agreement, dated as of the 7th day of October,
1987, between Indianapolis Power & Light Company ("IPL" or a
"Party"), and Wabash Valley Power Association, Inc. ("Wabash
Valley" or a "Party"), both Indiana corporations (the
"Parties"):

WITNESSETH:

0.02 WHEREAS, IPL is a public utility engaged in the
generation, transmission, distribution and sale of electric
power and energy in Indiana; and

0.03 WHEREAS, IPL is interconnected with the Joint
Transmission System (hereinafter defined) that is jointly
owned by Wabash Valley, Public Service Company of Indiana,
Inc. ("PSI") and the Indiana Municipal Power Agency ("IMPA");
and

0.04 WHEREAS, Wabash Valley is a Not-For-Profit Corporation
which jointly owns the Joint Transmission System in the State
of Indiana and is engaged, among other things, in the
generation, transmission and sale of electric power and
energy to Rural Electric Membership Corporations serving
customers in northern Indiana and southern Michigan; and

0.05 WHEREAS, the Parties believe mutual benefits can be
realized from conducting coordinated interconnected
operation, such as the interchange, sale and purchase of
electric power and energy; and

0.06 WHEREAS, the Parties desire to fix the terms and
conditions upon which such interconnected operations may be
conducted 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

                        DEFINITIONS

1.01 Joint Transmission System.  The Joint Transmission
System shall be the transmission facilities jointly owned by
PSI, Wabash Valley, and IMPA consisting of PSI facilities
functionally serving as transmission facilities and
facilities of Wabash Valley and IMPA connected to the
transmission facilities of PSI, all having an operating
voltage of 69 KV or higher, as defined in the Uniform System
of Accounts prescribed by the Federal Energy Regulatory
Commission ("FERC").

1.02 Out-of-Pocket Cost.  Out-of-Pocket Cost shall mean those
costs of generating electric energy in the generating
stations of the system of either Party which are incurred by
the supplying system directly by reason of its generating of
such energy and which, otherwise, would not have been
incurred by such system.  Out-of-Pocket Cost of electric
energy purchased from a source outside of the system of the
supplying Party will be the total amount paid therefor by the
supplying Party which, otherwise, would not have been paid by
such Party.

                         ARTICLE 2

             PROVISIONS REGARDING CONTINUITY OR
         INTERRUPTION OF INTERCONNECTION OPERATIONS

2.01 Representations as to Facilities and Equipment.  IPL
hereby represents that it owns and controls all the
transmission, substation and metering facilities and
equipment necessary to implement and carry out fully all the
provisions, terms and conditions of this Agreement.  Wabash
Valley hereby represents that it jointly owns the
transmission, substation and metering facilities and
equipment necessary to this Agreement and has obtained all
right, power and authority from PSI and/or IMPA that is
necessary and proper for the implementation and carrying out
of all transactions of the Parties contemplated by this
Agreement.  Wabash Valley hereby agrees that, notwithstanding
anything in this Agreement to the contrary, its
implementation of and compliance with the provisions, terms
and conditions of this Agreement and its resultant
obligations and responsibilities hereunder shall not be
excused because of the nature or extent of Wabash Valley's
ownership and control over the transmission, substation and
metering facilities and equipment it jointly owns with PSI
and IMPA.

2.02 Synchronous Operation.  At the Points of Interconnection
(hereinafter defined) throughout the duration of this
Agreement, subject to the provisions of this Paragraph 2.02
and of Paragraph 2.03 below, IPL and Wabash Valley systems
shall be operated in continuous synchronism.  If synchronous
operation of the systems at the Points of Interconnection
becomes interrupted either manually or automatically due to
reasons beyond the control of either Party or due to
scheduled maintenance that has been agreed to by both
Parties, the Parties shall cooperate to remove the cause of
such interruption as soon as practicable and restore the
Points of Interconnection to normal operating conditions.
Neither Party shall be responsible to the other for any
damage or loss of revenue caused by such interruption.

2.03 Interruption of Operation.  The Parties agree that
either of them may interrupt synchronous operation through
the Points of Interconnection if either determines that its
facilities may be damaged due to excessive loadings, and such
loadings may be reduced or alleviated by such interruption.
If such interruption occurs, the Parties shall cooperate to
remove the cause of such loadings as soon as practicable and
restore the Points of Interconnection to normal operating
condition.  Neither Party shall be responsible to the other
for damage or loss of revenue caused by such interruption.

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 herein described in the event either Party
determines that this interconnection contributes to the
excessive loading and requests such negotiation.

2.04 Maintenance of Equipment.  The Parties shall each keep
the lines, together with all associated equipment and
appurtenances that are located on their respective sides of
the Points of Interconnection, 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.

2.05 New Interconnections.  The Parties understand that each
of their transmission systems is interconnected with the
electric transmission systems of other electric utility
companies and each has contracted for other such
interconnections and may hereafter during the term of this
Agreement desire to make additional interconnections with
such companies or with other electric utility companies.
Each such additional interconnection with another electric
utility system shall be discussed between the Parties and if,
in the opinion of either Party, the establishment of such
interconnection will cause unreasonable transfers of real
power or reactive power through either system during normal
parallel operations as a result of the proposed additional
interconnection, before such additional interconnection is
made, joint load studies shall be conducted to determine the
effect such interconnection will have on the transmission
systems of the Parties.  If, as the result of such studies it
is the reasonable opinion of a Party that the proposed
additional interconnection would cause unreasonable transfers
of real power or reactive power through the electric
transmission system of such Party or otherwise impair the
ability of such Party to carry out its own obligations, then
the Party proposing such additional interconnection shall,
before such proposed interconnection is placed in service:

     2.051  agree to compensate the other Party for the use
     of that portion of its facilities determined to be
     dedicated to the proposed additional interconnection;
     and/or

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

     2.053  abandon the establishment of such additional
     interconnection.

                         ARTICLE 3

                  SERVICES TO BE RENDERED

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

     3.011  Emergency Service.  The furnishing of mutual
     emergency and standby assistance, in accordance with
     Service Schedule A annexed hereto.

     3.012  Energy Transfer.  The transfer of electric energy
     through the transmission system of one Party for the
     benefit of the other, in accordance with Service
     Schedule B annexed hereto.

     3.013  Interchange Power.  The interchange, sale, and
     purchase of energy to effect operating economies, in
     accordance with Service Schedule C annexed hereto.

     3.014  Short-Term Power.  The sale and purchase of short-
     term electric power and energy available on the system
     of one Party and desired by the other Party, in
     accordance with Service Schedule D annexed hereto.

     3.015  Limited Term Power (Firm).  The sale and purchase
     of limited term power and energy available on the system
     of one Party and desired by the other Party, in
     accordance with Service Schedule E annexed hereto;

     3.016  Diversity Power.  The sale and purchase of
     diversity power and energy, in accordance with Service
     Schedule F annexed hereto.

3.02 Inasmuch as the specific services to be rendered in
furtherance of such purpose will vary, and the terms and
conditions applicable to such services may require
modification from time to time while this Agreement is in
effect, it is intended that, except as provided in Paragraph
3.05 below, such specific services and the terms and
conditions applicable thereto be set forth in service
schedules mutually agreed upon from time to time between the
Parties.  Such service schedules, until and unless changed by
such mutual agreement, shall be those provided by Paragraph
3.03 below, each of which, while in effect, shall be deemed
to be a part of this Agreement.

3.03 The respective service schedules shall be designated as
follows:

       I. Service Schedule A - Emergency Service

      II. Service Schedule B - Energy Transfer

     III. Service Schedule C - Interchange Power

      IV. Service Schedule D - Short-Term Power

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

      VI. Service Schedule F - Diversity Power

Such service schedules as agreed upon between the Parties are
attached hereto, made a part hereof, and marked Exhibits I,
II, III, IV, V, and VI, respectively.
3.04 Price Protection.  Except as provided in Section 4.2 of
Service Schedule F, nothing in this Agreement shall require
either Party to purchase power or energy from a third party
and resell it to the other Party at a price less than the
total cost of supplying such purchased power or energy.

3.05 Specific Short-Term Power Purchase.  Wabash Valley
hereby agrees to purchase from IPL and IPL agrees to provide
to Wabash Valley, 100 megawatts of short-term power and
energy beginning January 1, 1988 through December 31, 1988 at
a demand rate of $.47/KW/week and an energy rate of IPL's Out-
of-Pocket Costs plus 10%.  In all other respects, such
purchase and sale shall be in accordance with and subject to
the terms and conditions of this Agreement and of Service
Schedule D hereof.

3.06 Energy Scheduling.  As a general practice, the receiving
Party shall schedule energy deliveries on an hourly basis
with the supplying Party by 12:00 o'clock Noon, E.S.T., of
the day before such energy is to be delivered; thereafter,
the supplying Party shall not be obligated to schedule energy
deliveries until the next day; provided, however, that the
Parties may schedule energy at such other times and upon such
other conditions and/or make such changes in existing energy
schedules as both Parties may agree upon in writing.

                         ARTICLE 4

                     SERVICE CONDITIONS

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

4.02 Control of Kilovar Exchange.  It is intended 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 their respective
systems.  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 Party, in harmony with sound
engineering principles of transmission operation with
interconnected systems, is subject to numerous variables
contingent upon loading and operating conditions that my
exist simultaneously on both systems.  The operating
procedures and schedules so set up 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.

4.03  Control of Unscheduled Power and Energy Deliveries.
The Paries shall exercise reasonable foresight in carrying
out all matters related to the providing and operating of
their respective electric power resources so as to minimize,
to the extent practicable, deviations between actual and
scheduled deliveries of electric power and energy between
their systems.  The Parties shall provide and install on
their respective systems such communication and telemetering
facilities as are essential to so minimize such deviations
and, to avoid, to the extent practicable, deviations from
scheduled deliveries, shall fully cooperate with each other
and with third parties whose systems are 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 it, unscheduled
deliveries of electric energy from one Party to the other may
occur.  In such events, electric energy delivered hereunder
shall be settled for either by the return of equivalent
energy or by payment of the Out-of-Pocket Cost (such cost
being at the Point or Points of Interconnection set forth in
Paragraph 5.01 below, taking into account electrical losses
incurred from the source or sources of such energy to said
Point or Points) of electric energy delivered hereunder to
the supplying Party plus ten percent of such cost.  If
equivalent energy is returned, it shall be returned at times
when the load conditions of the Party receiving it are
substantially equivalent to the load conditions of such party
at the time the energy for which it is returned was delivered
or, if such Party elects to have equivalent energy returned
under different conditions, it shall be returned in such
amounts, to be agreed upon by the Operating Committee, as
will compensate such Party for the difference in conditions.

                         ARTICLE 5

       DELIVERY POINTS, METERING POINTS, AND METERING

5.01 Points of Interconnection.

     5.011  All electric energy delivered under this
     Agreement shall be of the character commonly known as
     three-phase sixty hertz energy and, except as otherwise
     provided in Paragraph 5.012 below, shall be delivered at
     the IPL established points of interconnection listed
     below ("Points of Interconnection"):

          Petersburg substation of IPL near Petersburg,
     Indiana
          Sunnyside substation of IPL near Oaklandon, Indiana
          Five Points substation of PSI in Five Points,
Indiana
          Whitestown substation of PSI in Whitestown, Indiana

     5.012  In addition to the Points of Interconnection, IPL
     has interconnections with Indiana & Michigan Electric
     Company, Southern Indiana Gas and Electric Company and
     Hoosier Energy Rural Electric Cooperative, Inc. (each
     such utility being hereinafter referred to as a "Third
     Party").  If Wabash Valley requests IPL to deliver
     energy under this Agreement to a Third Party, Wabash
     Valley shall be responsible for obtaining transmission
     agreements with such Third Party for the transmission
     and delivery of energy to a designated Third Party
     interconnection point for and on behalf of Wabash
     Valley; provided, that IPL shall not be responsible to
     Wabash Valley or such Third Party for such energy beyond
     such Third Party interconnection point.  Wabash Valley
     shall provide in advance to IPL an information copy of
     each such transmission agreement and a copy of each PSI,
     IMPA and Third Party letters concurring with each of
     such transactions.  In addition, Wabash Valley shall
     obtain IPL's consent in writing to such  Third Party
     transaction, which consent shall not be unreasonably
     withheld.

5.02 Metering Points.  Electric power and energy supplied
under this Agreement shall be measured by suitable metering
equipment, at the voltages and metering points specified
below ("Metering Points") and at such other points, voltages,
and ownership as may be agreed upon by the parties in a
written amendment hereto:

     345 KV meters owned by IPL at the Petersburg
     substation of IPL.

     138 KV meters owned by IPL at the Petersburg
     substation of IPL.

     345 KV meters owned by IPL at the Sunnyside
     substation of IPL.

     138 KV meters owned by IPL at the Five Points
     substation of PSI.

     345 KV meters owned by IPL at the Whitestown
     substation of PSI.

5.03 Metering Equipment.  Suitable metering equipment at the
metering points provided in Paragraph 5.01 above shall
include electric meters, potential and current transformers,
and such other appurtenances as shall be necessary to give
for each direction of flow the following quantities:  a
continuous automatic graphic record of both kilowatts and
kilovars; an automatic record of the kilowatthours for each
clock hour; and a continuous integrating record of the
kilowatthours.

5.04 Measurement of Electric Energy.  Measurement of electric
energy under this Agreement shall be made by standard types
of electric meters installed and maintained at the Metering
Points.  The timing devices of meters shall be synchronized
as closely as practical.  All meters shall be sealed, and the
seals shall be broken only when the meters are to be tested
or adjusted.

5.05 Access to Meters and Records.  Authorized
Representatives (hereinafter defined) of both Parties shall
have reasonable access to the premises where the meters are
located and to the records made by the meters.

5.06 Meter Testing.  Each Party shall routinely test or have
tested the above-referenced meters and shall maintain records
of meter accuracy all in accordance with prudent utility
practices.  Each Party shall have the right, at its expense,
to require that the other Party conduct a special test of its
meters as soon as practicable; provided, that if such test
shows the meter to be more than two percent (2%) inaccurate,
the Party owning the meter shall bear the cost of such test.
Representatives of both Parties shall be notified and
afforded the opportunity to be present at all routine or
special tests and whenever any readings are taken from meters
not providing an automatic record.  Both Parties shall be
provided with a schedule of routine testing dates for
metering equipment which measures transactions entered into
pursuant to this Agreement.

5.07 Adjustments Due to Inaccuracies.  If any metering
equipment test discloses an inaccuracy exceeding two percent
(2%), the energy account between the Parties shall be
adjusted to correct for the inaccuracy disclosed over the
shortest of the following periods; (i) for the six (6) month
period immediately preceding the day of the test, or (ii) for
the period that such inaccuracy may be determined to have
existed, or (iii) if the last test took place within the
immediately preceding six month period and the period of
inaccuracy cannot be determined, for the period since the
last test.  Should the metering equipment fail to register,
the amount of electric power and energy delivered shall be
determined from the best available data.

5.08 Communication, Telemetering And Load Control Facilities.
Each Party shall provide such communication, telemetering and
load control facilities as are now or may hereafter be
determined and agreed upon by the Parties as necessary for
the proper and efficient interconnection operation of the
Parties' systems.

                         ARTICLE 6

                   RECORDS AND STATEMENTS

6.01 Records.  In addition to records of the metering
provided for in Article 5 hereof, the Parties shall keep
complete records as may be needed to substantiate a clear
history of the various deliveries of electric energy made,
and of the clock-hour integrated demands in kilowatthours
delivered, by one Party to the other.  In maintaining such
records, the Parties shall effect such segregations and
allocations of demands and electric energy delivered into
classes representing the various services and conditions as
may be needed to effect settlements under this Agreement.
All such records shall be retained by the Party keeping the
records.  A Party's records shall be available at all
reasonable times for inspection by the other Party's
Representative and may be copied at such other Party's
expense.

6.02 Statements.  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 this Agreement.

                         ARTICLE 7

          BILLINGS, PAYMENTS AND BILLING DISPUTES

7.01 All bills for amounts owed by one Party to the other
shall be due and payable on the fifteenth (15th) day of the
month next following the month in which the service was
provided, or on the tenth (10th) day after receipt of a bill
therefor, whichever is later.  Interest on unpaid amounts
shall accrue at the annual rate of five percent (5%) above
the prime commercial lending rate established from time to
time by Merchants National Bank and Trust Company of
Indianapolis, Indiana (the "Prime Lending Rate") and is
payable from the date the bill is due to the date of payment.
The term "month" shall mean a calendar month for the purpose
of settlements under this Agreement.

7.02 Billing Disputes.  If either Party disputes the
correctness of a bill, it 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
decision.  Should the Operating Committee be unable to reach
a decision, the matter shall be submitted to the President of
IPL and the General Manager of Wabash Valley for decision.
Any refund or additional payment ordered by the Operating
Committee or by the President of IPL and General Manager of
Wabash Valley shall be subject to interest computed at the
Prime Lending Rate existing at the time of the refund or
additional payment plus five percent (5%), said interest to
be calculated, in the case of a refund, from the date the
amount to be refunded was paid to the date of the refund and,
in the case of an additional amount ordered to be paid, from
the original due date to the payment date.

                         ARTICLE 8

                    OPERATING COMMITTEE

8.01 Operating Committee Organization And Duties.  To
coordinate the operation of their respective generation,
transmission and substation facilities in order that the
advantages to be derived under this Agreement may be realized
by the Parties hereto to the fullest extent practicable, the
Parties shall establish a committee of authorized
representatives to be known as the Operating Committee.  Each
Party shall designate in a writing delivered to the other
Party, the person who is to act as its representative on the
Operating Committee and each person who may serve as
alternates whenever such representative is unable to act
("Representatives").  Each of such Representatives shall be
persons familiar with the generation, transmission, and
substation facilities of the system of the Party he or she
represents, and each shall be fully authorized (i) to
cooperate with the other Representatives and (ii) to
determine and agree from time to time, in accordance with
this Agreement and with any other relevant agreements then in
effect between the Parties, upon the following:

     8.011  All matters pertaining to the coordination of the
     maintenance of generation 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 specified herein in
     respect of which cooperation, coordination, and
     agreement as to quantity, time, method, terms and
     conditions are necessary to the efficient operation of
     the respective systems of the Parties, to the end that
     the intent and purpose of this Agreement shall be
     realized by the Parties to the fullest extent
     practicable.

8.02 Operating Committee Access.  For the purpose of
inspection and reading of meters, checking of pertinent
records and related matters, the Representatives shall have
the right of access at any reasonable time to all facilities
and equipment of the Parties used or to be used in the
performance of this Agreement.

8.03 Operating Committee Expenses.  Each Party shall be
responsible for the expenses of its members; provided that
any expense jointly incurred by the Operating Committee in
performing its duties shall be shared equally by the Parties.

8.04 Operating Committee Meetings.  The Operating Committee
shall meet at least annually at a time and place mutually
agreed to by the Representatives.  On request of any
Representative, a special meeting shall be arranged not more
than five working days after the request unless the Party
requesting the meeting agrees to a later date.  Attendance at
the meetings shall not be limited to Representatives;
however, the Parties recognize the practical necessity of
limiting attendance of non-Representatives to those who are
expected to take an active part on the agenda for a given
meeting.

8.05 Agreement Not To Be Modified By Committee.  The
Operating Committee shall not have authority to modify any of
the terms or conditions of this Agreement.

8.06 Change of Representatives.  Each Party shall give prompt
written notice to the other Party of any change in
designation of its primary or alternate Representative on the
Operating Committee.

8.07 Unresolved Disputes.  If the Operating Committee shall
be unable to take action on any matter to be acted upon by it
under this Agreement because of a dispute between the
Representatives as to such matter, then the matter shall be
referred to the President of IPL and the General Manager of
Wabash Valley.

                         ARTICLE 9

           CONTINUITY AND SUSPENSION OF SERVICE,
                 RELATIVE RESPONSIBILITIES

9.01 Continuity and Suspension of Service.  Each Party shall
exercise reasonable care and foresight to maintain continuity
of service as provided in this Agreement, but neither Party
shall be considered in Default (hereinafter defined) in
respect of any obligation hereunder if prevented from
fulfilling such obligation by reason of Force Majeure as
defined in Article 11 below.  In no event shall either Party
be liable to the other Party for loss or damage arising from
failure, interruption or suspension of service.  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 suspensions 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.

9.02 Relative Responsibilities.  Each Party assumes all
responsibility for receipt and delivery of electricity on its
system to and from its Points of Interconnection.  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.  Neither Party shall, in any event, be
liable for damage or injury to any persons or property,
whatsoever, arising, accruing or resulting from, in any
manner, the receiving, transmission, control, use,
application or distribution by the other Party of said
electricity.  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 this Agreement.

                         ARTICLE 10

                     TERM OF AGREEMENT

10.01     Effective Date.  The effective date of this
Agreement (the "Effective Date") shall be the date as of
which all conditions precedent set forth in Paragraph 13.01
below have been satisfied.  Such Effective Date shall be
specified in a writing executed by both Parties.  The Parties
agree to use their best efforts to support and cooperate with
each other to satisfy said conditions precedent.

10.02     Term.  The term of this Agreement and of the
annexed Service Schedules shall begin on the Effective Date
and continue through December 31, 1997 (the "Initial Term");
thereafter, the Agreement and Service Schedules shall
continue for successive terms of three (3) years each until
terminated pursuant to notice given by either Party to the
other or otherwise terminated under Paragraphs 18.01 or 19.03
below.  Any notice of termination given hereunder shall be
given in writing, at least two (2) years prior to the end of
the Initial Term or any successive term, and may be delivered
at any time after the Effective Date of this Agreement;
provided, that this Agreement shall not be deemed to have
terminated until all prior commitments for sales or purchases
of power and energy under this Agreement have been fulfilled
and all payments therefor have been made.

                         ARTICLE 11

                       FORCE MAJEURE

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

                         ARTICLE 12

                          DEFAULT

12.01     Default Defined.  As used herein, "Default" shall
mean the failure of a Party to make any payment or perform
any obligation at the time and in the manner required by this
Agreement, except where such failure to discharge obligations
(other than the payment of money) is the result of Force
Majeure.  Failure to make any payment in the time and manner
required by this Agreement shall not be excused as a Default
by payment of late charges except with respect to a Default
cured in accordance with the provisions in Paragraph 12.02
below.

12.02     Remedies for Default.  Upon failure of a Party to
make a payment or perform an obligation required hereunder,
the other Party shall give written notice of Default to the
Defaulting Party.  The Defaulting Party shall have thirty
(30) days within which to cure the Default.  If a Default is
not cured within such period, the Party not in Default, at
its option, may, in addition to all other rights and remedies
available at law, in equity or under any other provision of
this Agreement:  (i) give notice to the Defaulting Party of
its intention to cure the Default and to take such steps as
such Party deems necessary to cure the Default, or (ii)
suspend this Agreement for a period of 6 months, after which
this Agreement shall automatically terminate.  The Defaulting
Party shall, in any event, pay to the other Party the total
of all additional costs reasonably incurred by the Party as a
result of such Default and/or the curing of such Default,
including reasonable attorneys' fees, money reasonably paid
to others, the reasonable equivalent in money for services or
property obtained, and any other costs reasonably incurred by
such non-Defaulting Party in attempting to remedy such
Default, together with interest on the total of such costs at
the per annum rate of five (5) percent above the Prime
Lending Rate.  This provision is not intended as a liquidated
damages provision or to limit liability in any way, and the
Party not in Default may also maintain such other actions for
damages as may be provided by law, in equity or under this
Agreement.

                         ARTICLE 13

           CONDITIONS PRECEDENT TO EFFECTIVENESS
                OF AGREEMENT AND AMENDMENTS

13.01     Conditions Precedent.  The Effective Date of this
Agreement is conditional upon the approval by the United
States Bankruptcy Court having jurisdiction over the property
and operations of Wabash Valley and the approval or
acceptance of this Agreement by FERC and any other regulatory
authority or other governmental agency having jurisdiction.
If any of the terms and conditions of this Agreement are
altered or made impossible of performance by order, rule, or
regulation of said Court or of any such regulatory agency
and, as a result, 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 impossibility of such performance results in a
substantial loss of the benefits to be derived from this
Agreement, this Agreement may be terminated forthwith upon
notice.

13.02     Cooperation With FERC Filing.  Both Parties
recognize and agree that this Agreement must be filed with
the FERC, and both Parties agree to jointly request
acceptance for filing of this Agreement without suspension by
the FERC.  In this connection, both Parties agree that each
of them will execute any and all documents, duly authorize
all officers or agents as necessary, and do all other things
necessary and appropriate to secure acceptance for filing of
this Agreement, including the terms and conditions and the
initial rates and charges hereof, by the FERC without
suspension, or change or modification in the terms hereof.

13.03     Amendments.  Except as otherwise provided in
Paragraph 19.02 below or in the provisions of the Service
Schedules, this Agreement may be amended only by mutual
agreement of the Parties, which amendment shall be in writing
and shall become effective upon satisfaction of the above
Conditions Precedent applicable thereto.

                         ARTICLE 14

        INDEMNIFICATION AND LIMITATION OF LIABILITY

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

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

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

                         ARTICLE 15

                           TAXES

15.01     If at any time during the term of this Agreement
there should be levied or assessed against either of the
Parties any direct taxes by any taxing authority on the power
and/or energy generated, purchased, sold, transmitted,
interchanged, or exchanged under this Agreement, which taxes
are in addition to or different from the forms of direct
taxes being levied or assessed on the date of this Agreement
and such direct taxes results in increasing the cost to
either or both Parties of carrying out the provisions of this
Agreement, then the rates and charges for such power and/or
energy furnished hereunder shall be increased automatically
to the extent necessary to make adequate and equitable
allowance for such taxes.

                         ARTICLE 16

                          WAIVERS

16.01     Any waiver by either Party of its rights under this
Agreement, shall not be deemed a waiver with respect to any
rights that subsequently accrue.  Any delay, less than the
statutory period of limitations, in asserting or enforcing
any rights under this Agreement, shall not be deemed a waiver
of such rights.

                         ARTICLE 17

                         INSURANCE

17.01     Insurance.  Each Party shall be responsible for the
procurement and maintenance of its own property, casualty and
third-party liability insurance to adequately protect its
personnel and property and to cover its liabilities and
responsibilities under this Agreement.

                         ARTICLE 18

                         ASSIGNMENT

18.01     Assignment of Agreement.  This Agreement shall
inure to the benefit of, and be binding upon, the respective
successors and assigns of the Parties and, insofar as
permitted by law, on any trustee appointed for a Party under
the United States Bankruptcy Code; and this Agreement may not
be assigned by either Party, without the written consent of
the other Party.  In the event either Party is liquidated or
dissolved as a corporation or otherwise terminates its
business operations, this Agreement shall become null and
void and all obligations under this Agreement and the Service
Schedules, except financial obligations incurred prior to
such event shall cease upon the date of such event.

                         ARTICLE 19

                       MISCELLANEOUS

19.01     Prudent Utility Practices.  The Parties shall
discharge all obligations under this Agreement in accordance
with prudent utility practices.
19.02     Change in Rates.  Nothing herein shall be construed
as affecting in any way the right of Wabash Valley to
unilaterally make a change in rates or charges applicable to
the furnishing of service by Wabash Valley under this
Agreement provided such change is approved by appropriate
state and/or federal regulatory authority.  Nothing contained
herein shall be construed as affecting in any way the right
of IPL in furnishing service under these rate schedules to
unilaterally make application to the FERC for a change in
rates under Section 205 of the Federal Power Act and pursuant
to the FERC's Rules and Regulations promulgated thereunder.

19.03     No Partnerships; Tax Matters.  Notwithstanding any
provision of this 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
this Agreement to the contrary which has an adverse tax
effect on either Party shall render this Agreement null and
void from its inception.

19.04     Survivorship Of Certain Obligations.
Notwithstanding Paragraph 19.03 above, the voidance of this
Agreement shall not discharge any Party from any obligation
it owes to the other Party under this Agreement by reason of
any transaction, loss, cost, damage, expense or liability
which shall have occurred or arisen after the Effective Date
of this Agreement, but prior to such voidance.  It is the
intent of the Parties that should this Agreement be voided
under Paragraph 19.03 above, the satisfaction of any such
obligation and the provisions for indemnification and limited
liability of Article 14 above shall constitute a separate
agreement between the Parties that is severable from this
Agreement and, as such, shall remain in full force and effect
for actions that occurred prior to the voidance of this
Agreement.

19.05     Computation of Time.  In computing any period of
time prescribed or allowed by this 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.

19.06     Section Headings Not To Affect Meaning.  The
descriptive headings of the Articles and paragraphs of this
Agreement have been inserted for convenience only and shall
not modify or restrict any of the terms and provisions
thereof.

                         ARTICLE 20

                          NOTICES

20.01     Notices Relating to Provisions of this Agreement.
Any notice, demand or request made by a Party to the other
Party pursuant to any provision of this Agreement shall be
made in writing and shall be delivered in person, by prepaid
telegram or by registered or certified mail to the named
officer of the Party at the address listed below; provided,
that either Party may, from time to time, change such
designated officer or the address thereof by giving written
notice of such change to the other Party.

     TO IPL:

          President
          Indianapolis Power & Light Company
          P. O. Box 1595B
          Indianapolis, IN  46206
     TO Wabash Valley:

          General Manager
          Wabash Valley Power Association, Inc.
          722 North High School Road
          P. O. Box 24700
          Indianapolis, IN  46224

20.02     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, as circumstances dictate,
to a Representative; 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 21

        GOVERNING LAW AND CONSTRUCTION OF AGREEMENT

21.01     This Agreement shall be governed by and construed
according to the laws of the State of Indiana.

                         ARTICLE 22

             ENTIRE AGREEMENT CONTAINED HEREIN

22.01     This is the entire agreement between the Parties
and no oral or other written representations shall have the
affect of amending or modifying this Agreement.

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

                              INDIANAPOLIS POWER & LIGHT
COMPANY

                              By    /s/ Robert W. Hill
                                 Robert W. Hill, President
and
                                 Chief Operating Officer

ATTEST:

By    /s/ Marcus E. Woods
   Marcus E. Woods, Vice President,
   Secretary and General Counsel

                              WABASH VALLEY POWER
ASSOCIATION,
                              INC.

                              By    /s/ Edwin G. Beucler
                                 Edwin G. Beucler, President

ATTEST:

By:     /s/ Joe R. Clem
     Joe R. Clem, Secretary
                                                  EXHIBIT I

                     SERVICE SCHEDULE A

                     EMERGENCY SERVICE

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
throughout the duration of the Agreement.

SECTION 3 - SERVICES TO BE RENDERED

3.1  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, which impair or
jeopardize the ability of a Party suffering the emergency to
meet the loads of its system, the other Party shall deliver
the electric energy ("Emergency Energy") that such Party
requests; provided, however, that a Party shall not be
obligated to deliver such energy which it, in its sole
judgment, 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 to the other Party:  (a) for a period
in excess of forty-eight consecutive hours during any single
emergency, or (b) when it is delivering electric energy under
another (other) mutual emergency interchange agreement(s), or
(c) at any time that delivery of emergency energy will impair
its own system's ability to meet its load.

SECTION 4 - COMPENSATION

4.1  Emergency Energy delivered under Section 3 above that is
generated by the supplying Party 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 greater of
110 percent of the Out-of-Pocket Costs of supplying such
Energy or 30 mills per kilowatthour thereof.

4.2  Emergency Energy delivered under Section 3 above that is
purchased by the supplying party from another interconnected
system which is not a signatory to this Agreement ("Third
Party") at the request of the receiving party shall be
settled for as follows:

     4.21 When IPL is the supplying party, a payment of 100
     percent of the amount paid to such Third Party plus up
     to 3.46 mills per kilowatthour (consisting of up to 2.46
     mills per kilowatthour for a transmission charge and 1
     mill per kilowatthour for difficult to quantify energy
     related costs) plus any transmission losses.

     4.22 When Wabash Valley is the supplying party, a
     payment of 100 percent of the amount paid to such third
     party plus 2.0 mills per kilowatthour plus any
     transmission losses.

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

                     SERVICE SCHEDULE B

                      ENERGY TRANSFER

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
throughout the duration of the Agreement.

SECTION 3 - TRANSFER ARRANGEMENT

3.1  In carrying out the interconnected operation of their
respective systems as provided for under the Agreement,
energy being received by a portion of one Party's system from
another portion of its system or 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 to which the Parties are connected.  Such flow of
energy may occur during periods of emergency caused by the
failure of either sources of power or transmission
facilities, or both.  In respect to such flow of energy
(hereinafter called "Energy Transfer") the Parties agree as
follows:

     3.11 Such Energy Transfer over their respective
     transmission facilities shall be permitted whenever such
     transfer occurs; provided, that such Energy Transfer
     shall not be of such magnitude or duration as to affect
     adversely, or jeopardize the ability of, the Party over
     whose system such Energy Transfers occur, to render
     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 may have, contractual arrangements
     for the interchange of power or energy.

     3.12 The Parties recognize that in carrying out the
     provisions of this Service Schedule, the 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 to
     meet its own requirements, as described under 3.11
     above, is not affected adversely or jeopardized.  In the
     event the need for such additional transmission
     facilities becomes apparent to either of the Parties
     during 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 reexamine conditions relating to
     Energy Transfer.  In such reexamination, if called for,
     the Parties shall agree upon such additional
     transmission facilities as may be required to be
     installed, if any, and upon an equitable basis for
     bearing the cost of installing, maintaining and
     operating such facilities, if installed.

SECTION 4 - POWER AND ENERGY ACCOUNTING

4.1  The Parties recognize that Energy Transfer as described
under Section 3 above, 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 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 the Agreement.  Proper
consideration to such electrical losses will be in accordance
with the manner agreed upon by the Operating Committee.  It
is understood by the Parties, however, that such electrical
losses resulting from Energy 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 the Energy Transfer is being made.  The
Parties agree that initially such basic conditions will be
established as those that exist when the scheduled net
delivery between the systems of the Parties and between their
respective systems and the systems of other interconnected
companies, is zero kilowatts.  It is further understood that,
from time to time, conditions may require the establishment
of different basic conditions for such purpose.  Either Party
by written notice given to the other Party may call for a
prompt reexamination and reconsideration of matters pertinent
to the establishment of said basic conditions, whenever such
reexamination appears to be warranted, and the Parties will
thereupon agree to effect such changes in the basic
conditions, if any, that will equitably compensate the
Parties for such losses.  Should such reexamination be
required, a statement will be prepared by the Parties which
shall include in detail the amounts of energy delivered and
received by the Parties that are associated with Energy
Transfer and the amounts of electrical losses associated
therewith.
                                                  EXHIBIT III

                     SERVICE SCHEDULE C

                     INTERCHANGE POWER

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
throughout the duration of the Agreement.

SECTION 3 - SERVICES TO BE RENDERED

3.1  Economy Energy.  Either Party may arrange to purchase
from the other Party electrical energy ("Economy Energy")
when it is possible to effect a saving thereby and, when, in
the sole judgment of the supplying Party, such energy is
available.   Prior to each Economy Energy transaction, the
amount of energy, the time of its delivery, and the
compensation therefore shall be determined by the Parties.
Compensation so determined by the Parties shall not be
subject to later review or adjustment.  In the event
conditions arise during such scheduled period which cause the
delivery of Economy Energy to become burdensome to the
supplying Party, said Party has the right to request the
receiving Party to reduce the amount of such energy to any
quantity specified.  Receipt or delivery of Economy Energy
may also be arranged with other interconnected systems not
Parties to this Agreement.

3.2  Non-Displacement Energy.  It is recognized that
occasions will arise when transactions under subsection 3.1
above will be impracticable although a Party may have
electric energy (herein called "Non-Displacement Energy")
which it is willing to make available from surplus capacity
from its own system or from outside sources, or both and
which can be utilized advantageously for short intervals by
the other Party.  In such event, the Party desiring such
receipt of energy shall notify the other Party of the extent
to which it desires to obtain Non-Displacement Energy, and if
the other Party, in its sole judgment, determines that Non-
Displacement Energy is available, schedules providing the
periods and extent of use shall be mutually agreed upon.
Neither Party shall be obligated to make any Non-Displacement
Energy available to the other.

SECTION 4 - COMPENSATION

ECONOMY ENERGY

4.1  The charge for Economy Energy purchased by either Party
from the other Party 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.

4.2  When Economy Energy is obtained from or delivered to a
system interconnected with either of the Parties which is not
a signatory to the Agreement ("Third Party"), payments among
the participants in such a transaction shall be based on the
Out-of-Pocket Costs of the supplying Party or Third Party
providing the Energy and an allocation of the gross savings,
which are defined as the difference between (1) what the Out-
of-Pocket Costs of the receiving Party or Third Party would
have been to generate such Energy, and (2) the Out-of-Pocket
Costs of the supplying Party or Third Party providing the
Energy.  Such allocation shall be made as provided in
Subsections 4.21 and 4.22 herein below.

     4.21 The transmitting party shall be paid (A) its cost
     of purchasing the Energy supplied, plus (B) its costs of
     additional transmission losses plus (C) the following:

          (1)  When IPL is such transmitting party:

               The greater of (i) fifteen percent of the
               gross savings remaining after deducting all
               such payments for transmission losses or (ii)
               an amount not to exceed 3.46 mills per
               kilowatthour of Energy received for
               transmission.

          (2)  When Wabash Valley is such transmitting party:

               The greater of (i) fifteen percent of the
               gross savings remaining after deducting all
               such payments for transmission losses or (ii)
               an amount not to exceed 2.0 mills per
               kilowatthour of Energy received for
               transmission.

     4.22 The supplying Party or Third Party shall be paid
     its Out-of-Pocket Costs of providing the Energy, plus
     one-half of the gross savings remaining after deducting
     all payments made under Subsection 4.21 (B) and (C).
     The receiving Party or Third Party shall pay an amount
     which will provide it with the other one-half of the
     gross savings remaining after deducting all payments
     made under Subsection 4.21 (B) and (C).

NON-DISPLACEMENT ENERGY

4.3  Non-Displacement Energy delivered hereunder 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 supplying Party, by payment of the Out-of-
Pocket Costs of the supplying Party in generating such Energy
plus ten percent of such cost.  If equivalent Energy is
returned, it shall be returned at times when the load
conditions of the Party receiving it are equivalent to the
load conditions of such Party at the time the energy in
exchange 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.

4.4  Non-Displacement Energy delivered under Subsection 3.2
above that is purchased by the supplying party from another
interconnected system which is not a signatory to this
Agreement ("Third Party") at the request of the receiving
party shall be settled for as follows:

     4.41 When IPL is the supplying party, a payment of 100
     percent of the amount paid to such Third Party, plus up
     to 3.46 mills per kilowatthour (consisting of up to 2.46
     mills per kilowatthour for a transmission charge and 1
     mill per kilowatthour for difficult to quantify energy
     related costs) plus any transmission losses.

     4.42 When Wabash Valley is the supplying party, a
     payment of 100 percent of the amount paid to such Third
     Party plus 2.0 mills per kilowatthour plus any
     transmission losses.
                                                  EXHIBIT IV

                     SERVICE SCHEDULE D

                      SHORT TERM POWER

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
until termination of the Agreement.

SECTION 3 - SERVICES TO BE RENDERED

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

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

3.3  During the period that Short Term Power has been
reserved as provided in Section 3.2 above, the supplying
Party shall deliver upon call electric energy (herein called
"Short Term Energy") to the other Party at the Point or
Points of Interconnection set forth in Section 5.01 of the
Agreement in the amounts not to exceed the number of
kilowatts reserved.  However, in the event conditions arise
during such period which could not have been reasonably
foreseen and such conditions would cause the delivery of said
power to be burdensome to the supplying Party, such Party
shall have the right to request the other Party to reduce for
any portion of such period the amount of Short Term Energy
being taken to that amount specified by the supplying Party.
The purchasing Party shall promptly comply with such
requirements of the supplying Party.

SECTION 4 - COMPENSATION

4.1  The Party reserving Weekly or Daily Short Term Power
shall pay the supplying Party the following demand charges:

     4.11 WEEKLY SHORT TERM POWER

     (a)  When IPL is the supplying Party, Wabash Valley
     shall pay IPL for Weekly Short Term Power at the rate of
     up to $1.05 per kilowatt reserved per week.
     (b)  When Wabash Valley is the supplying Party, IPL
     shall pay Wabash Valley for Weekly Short Term Power at
     the rate of up to $1.05 per kilowatt reserved per week.

     (c)  In the event the amount of Weekly Short Term Power
     reserved is reduced upon notice from the supplying
     Party, the demand charge for each day during which any
     such reduction is in effect shall be reduced by one-
     sixth (1/6) of the supplying Party's weekly demand rate
     per kilowatt for each kilowatt of reduction but not more
     than the rate agreed upon for each kilowatt per week.

     4.12 DAILY SHORT TERM POWER

     (a)  When IPL is the supplying Party, Wabash Valley
     shall pay IPL for Daily Short Term Power at the rate of
     up to $.21 per kilowatt reserved per day.

     (b)  When Wabash Valley is the supplying Party, IPL
     shall pay Wabash Valley for Daily Short Term Power at
     the rate of up to $.21 per kilowatt reserved per day.

     (c)  In the event the amount of Daily Short Term Power
     reserved is reduced upon notice from the supplying
     Party, the demand charge per kilowatt for each day
     during which any such reduction is in effect shall be
     waived for each kilowatt of reduction.

     4.13 THIRD PARTY WEEKLY SHORT TERM POWER

     (a)  For any week that Weekly Short Term Power is
     reserved by IPL for and at the request of Wabash Valley
     from a Third Party, such Short Term Power shall be
     supplied at the rate of up to $.295 per kilowatt
     reserved per week plus the demand charge paid therefor
     by IPL to the Third Party.

     (b)  For any week that Weekly Short Term Power is
     reserved by Wabash Valley for and at the request of IPL
     from a Third Party, such Short Term Power shall be
     supplied at the rate of $.12 per kilowatt reserved per
     week plus the demand charge paid therefor by Wabash
     Valley to the Third Party.

     (c)  In the event the amount of Weekly Short Term Power
     reserved from a Third Party is reduced upon the request
     of the Third Party, the demand charge for each day
     during which such reduction is in effect shall be
     reduced by the amount by which the demand charge payable
     by the supplying Party is reduced under its Agreement
     with such Third Party plus, in the case of Power
     reserved by IPL, one-sixth of the rate per kilowatt
     agreed to under Paragraph (a) of this Section 4.13 for
     each kilowatt of reduction each day; but not more than
     the rate agreed upon for each kilowatt per week; and, in
     the case of Power reserved by Wabash Valley, one-sixth
     of the rate per kilowatt stated in Paragraph (b) of this
     Section 4.13 for each kilowatt of reduction each day;
     but not more than the rate agreed upon for each kilowatt
     per week.

     4.14 THIRD PARTY DAILY SHORT TERM POWER

     (a)  For any day that Short Term Power is reserved by
     IPL for and at the request of Wabash Valley from a Third
     Party, such Short Term Power shall be supplied at the
     rate of up to $.059 per kilowatt reserved per day plus
     the demand charge paid therefor by IPL to the Third
     Party.

     (b)  For any day that Short Term Power is reserved by
     Wabash Valley for and at the request of IPL from a Third
     Party, such Short Term Power shall be supplied at the
     rate of $.02 per kilowatt reserved per day plus the
     demand charge paid therefor by Wabash Valley to the
     Third Party.

     (c)  In the event that the amount of Daily Short Term
     Power reserved from a Third Party is reduced upon the
     request of the Third Party, the demand charge for such
     Power shall be reduced by the amount by which the demand
     charge payable by the supplying Party is reduced by the
     Third Party.

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

     (a)  For each kilowatthour that is generated by the
     supplying Party's system, 100 percent of the Out-of-
     Pocket Costs of supplying Short Term Energy called for
     during such period, plus 10 percent of such costs.

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

     (c)  For each kilowatthour purchased by Wabash Valley
     from a Third Party in order to supply the Short Term
     Energy called for during such period, 100 percent of the
     amount of Energy charge paid therefor by Wabash Valley
     plus 1 mill per kilowatthour plus any transmission
     losses.
                                                  EXHIBIT V

                     SERVICE SCHEDULE E

                 LIMITED TERM POWER (FIRM)

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
until termination of the Agreement.

SECTION 3 - SERVICES TO BE RENDERED

3.1  Either Party, by giving the other Party notice, may
reserve for periods of not less than one (1) nor more than
twelve (12) months, such electric power [herein called
"Limited Term Power (Firm)"] as the other Party may be
willing to make available as Limited Term Power (Firm).  The
Party asked to supply Limited Term Power (Firm) shall be the
sole judge as to the amounts and periods that it has electric
power available that may be reserved by the other Party as
Limited Term Power (Firm).

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

     3.12 During each period that Limited Term Power (Firm)
     has been reserved as provided, the supplying Party shall
     deliver upon call electric energy [herein called Limited
     Term Energy (Firm)] to the other Party at the Point or
     Points of Interconnection set forth in Section 5.01 of
     Article 5 of the Agreement in any amount up to and
     including the number of kilowatts reserved.  However, in
     the event conditions arise during such period which
     could not have been reasonably foreseen at the time said
     power was reserved and such conditions would cause the
     delivery of Limited Term Energy (Firm) to be burdensome
     to the supplying Party, the supplying Party may, upon
     notice to the reserving Party, reduce or interrupt the
     delivery of such energy to preserve the integrity of, or
     to prevent or limit any instability on, its system.

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

SECTION 4 - COMPENSATION

4.1  The Party reserving Limited Term Power (Firm) shall pay
the supplying Party the following demand charges:

     4.11 MONTHLY LIMITED TERM POWER (FIRM)

     (a)  When IPL is the supplying Party, Wabash Valley
     shall pay IPL for Monthly Limited Term Power (Firm) at
     the rate of up to $5.50 per kilowatt reserved per month.
     (b)  When Wabash Valley is the supplying Party, IPL
     shall pay Wabash Valley for Monthly Limited Term Power
     (Firm) at the rate of up to $9.43 per kilowatt reserved
     per month.

     (c)  In the event the amount of Monthly Limited Term
     Power (Firm) taken is reduced upon notice from the
     supplying Party, the demand charge for each day during
     which any such reduction is in effect shall be reduced
     by one-twentieth (1/20) of the supplying Party's monthly
     demand rate per kilowatt for each kilowatt of reduction
     but not more than the rate agreed upon for each kilowatt
     per month.

     4.12 THIRD PARTY LIMITED TERM POWER (FIRM)

     (a)  For any month that Monthly Limited Term Power
     (Firm) is reserved by IPL for and at the request of
     Wabash Valley from a Third Party, such Monthly Limited
     Term Power (Firm) shall be supplied at the rate of up to
     $1.28 per kilowatt reserved per month plus the demand
     charge paid therefor by IPL to the Third Party.

     (b)  For any month that Monthly Limited Term Power
     (Firm) is reserved by Wabash Valley for and at the
     request of IPL from a Third Party, such Monthly Limited
     Term Power (Firm) shall be supplied at the rate of up to
     $1.20 per kilowatt reserved per month plus the demand
     charge paid therefor by Wabash Valley to the Third
     Party.

     (c)  In the event the amount of Monthly Limited Term
     Power (Firm) reserved from a Third Party is reduced upon
     the request of the Third Party, the demand charge for
     each day during which reduction is in effect shall be
     reduced by the amount by which the demand charge payable
     by the supplying Party is reduced under its Agreement
     with such Third Party plus, in the case of Power
     reserved by IPL one-thirtieth (1/30) of the rate per
     kilowatt agreed to under Paragraph (a) of this Section
     4.12 for each kilowatt of reduction each day; but not
     more than the rate agreed upon for each kilowatt per
     month; and, in the case of Power reserved by Wabash
     Valley, one-thirtieth (1/30) of the rate per kilowatt
     agreed to under Paragraph (b) of this Section 4.12 for
     each kilowatt of reduction each day; but not more than
     the rate agreed upon for each kilowatt per week.

4.2  The reserving Party shall pay the supplying Party for
all Limited Term Energy (Firm) delivered at the following
rates:

     (a)  For each kilowatthour that is generated by the
     supplying Party's system, 100 percent of the Out-of-
     Pocket Costs of supplying Limited Term Energy (Firm)
     called for during such period, plus 10 percent of such
     costs.

     (b)  For each kilowatthour purchased by IPL from a third
     Party in order to supply the Limited Term Energy called
     for during such period, 100 percent of the amount of the
     Energy charge paid therefor by IPL plus 1 mill per
     kilowatthour plus any transmission losses.

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

                     SERVICE SCHEDULE F

                      DIVERSITY POWER

Under Interconnection Agreement dated October 7, 1987 between
           Indianapolis Power & Light Company and
  Wabash Valley Power Association, Inc. (the "Agreement")

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the same
as those used in the Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of the
Effective Date of the Agreement and shall continue in effect
until termination of the Agreement.

SECTION 3 - DIVERSITY POWER

3.1  From time to time, because of differences in load
patterns a Party may have excess capacity during one Seasonal
Load Period at the same time the other Party is experiencing
its peak load season.  At such time it may be to the Parties'
mutual advantage to schedule an exchange of certain portions
of any such excess capacity.  Such capacity shall be termed
and is herein called "Diversity Power".

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

3.2  At any time Diversity Power transactions are agreed upon
between the Parties, the Party which purchases Diversity
Power during one Seasonal Load Period shall be obligated to
have available a like amount of Diversity Power for the other
Party during the other Seasonal Load Period.

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

SECTION 4 - COMPENSATION

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

4.2  Energy Charges - Energy shall be billed at Out-of-Pocket
Cost of the supplying Party plus ten percent of such cost.
In the event that any part of the Out-of-Pocket Cost includes
energy purchased by the supplying Party, only the energy
related portion of such purchase cost shall be included.  Any
associated charges for demand related costs shall be
excluded.

                     MODIFICATION NO. 1
                           TO THE
                 INTERCONNECTION AGREEMENT
                          BETWEEN
             INDIANAPOLIS POWER & LIGHT COMPANY
                            AND
           WABASH VALLEY POWER ASSOCIATION, INC.

THIS AMENDMENT made and entered into as of the 1st day of
January, 1995 by Indianapolis Power & Light Company ("IPL"),
being an Amendment to the Interconnection Agreement between
Wabash Valley Power Association, Inc. ("Buyer") and IPL dated
October 7, 1987 (the "Agreement").

                        WITNESSETH:

WHEREAS, IPL and Wabash Valley Power Association, Inc.,
entered into the Agreement on October 7, 1987, which
Agreement has been amended from time to time;

WHEREAS, the Agreement provides for the sale of power and

energy by IPL under Service Schedules described as:

          Service Schedule A                 Emergency Service

          Service Schedule C                 Interchange Power

          Service Schedule D                 Short-Term Power

          Service Schedule E                 Limited-Term Power

          Service Schedule F                 Diversity Power

WHEREAS, the Agreement provides for the recovery of

incremental costs or "out-of-pocket" costs occasioned by the

sale by IPL of electric energy;

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

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

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

NOW, THEREFORE, in consideration of the premises and the

terms and conditions set forth herein; IPL desires to amend

the Agreement as follows:

Section 1.     Compensation for SO2 Emission Allowances.

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

If Buyer opts to reimburse IPL in cash for SO2 Allowances
associated with Buyer's energy purchases for the month, the
cash amount due at billing will be determined by multiplying
the number of SO2 Allowances attributed to the sale by the
incremental cost of the SO2 Allowances, as determined in
Section 2.2, at the time of the sale.

If Buyer opts to reimburse IPL in SO2 Allowances, Buyer will
record or transfer to IPL's account, the number of SO2
Allowances calculated below, at the time cash settlement for
the energy is due.  In all cases, Buyer will transfer to
IPL's account the number of SO2 Allowances due IPL for
calendar year no later than January 15 of the following year.
"Transfer to IPL's account" shall mean, for purposes of the
Amendment, the transfer by the USEPA of the requisite number
of SO2 Allowances to IPL's Allowance Tracking System account
and the receipt by IPL of the Allowance Transfer
Confirmation.

Section 2.     Determination of SO2 Emission Allowances Due IPL.

     Section 2.1.   Number of SO2 Allowances

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

     Section 2.2 .  Cost of SO2 Allowances

     The incremental SO2 Allowance cost used to determine
     economic dispatch of IPL's generating units in any
     month, will also be the basis used to determine
     compensation for IPL's energy sales.  The incremental
     SO2 Allowances cost, in dollars per ton of SO2, shall be
     determined each month and will be based on the Cantor
     Fitzgerald offer  price for SO2 Allowances, or if such
     is not available, 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

                       MODIFICATION NO. 2

                             TO THE

                    INTERCONNECTION AGREEMENT

                             BETWEEN

               INDIANAPOLIS POWER & LIGHT COMPANY

                               AND

              WABASH VALLEY POWER ASSOCIATION, INC.

                         Effective as of

                       MODIFICATION NO. 2
                             TO THE
                    INTERCONNECTION AGREEMENT
                             BETWEEN
               INDIANAPOLIS POWER & LIGHT COMPANY
                               AND
              WABASH VALLEY POWER ASSOCIATION, 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 C - Interchange Power
                    Service Schedule D - Short-Term Power
                    Service Schedule E - Limited Term Power (Firm)
                    Service Schedule F - Diversity Power

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 Modification.

     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 Modification.

     Service Schedule C provides for compensation to IPL
regarding third party sale and resale transactions of Non-
Displacement Energy in the form of a stated transmission charge
plus "one mill per kilowatt-hour for difficult to quantify energy
related costs."  Service Schedule C is hereby revised to remove
the term "one mill per kilowatt-hour for difficult to quantify
energy related costs."

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, 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 charges are $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 rates, 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 charges are
$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 rates, 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
Wabash Valley Power Association, 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 Modification
No. 2 to govern service to Wabash Valley Power Association, Inc.
for this power sale, and charges for transmission and ancillary
services for this power sale will be assessed to Wabash Valley
Power Association, Inc. under the Open Access Transmission
Tariff.EXHIBIT 10.6

                INTERCONNECTION AGREEMENT

                         BETWEEN

           INDIANAPOLIS POWER & LIGHT COMPANY

                           AND

             INDIANA MUNICIPAL POWER AGENCY

0.01 This Agreement, dated as of the 19 day of August,
1994 (the "Agreement"), between Indianapolis Power &
Light Company ("IPL" or a "Party) an Indiana corporation,
and Indiana Municipal Power Agency ("IMPA" or a "Party")
a political subdivision of the State of Indiana,
collectively (the "Parties"):

WITNESSETH:

0.02 WHEREAS,  IPL is a public utility engaged in the
generation, transmission, distribution and sale of
electric power and energy in central Indiana; and

0.03 WHEREAS,  IMPA is a body corporate and politic and a
political subdivision of the State of Indiana which owns
in common tenancy and jointly operates the Joint
Transmission System and is engaged among other things, in
the generation, transmission and sale of electric power
and energy in Indiana; and,

0.04 WHEREAS,  the Parties believe mutual benefits can be
realized from coordinated interconnected operation, such
as the interchange, sale, and purchase of electric power
and energy; and,

0.05 WHEREAS,  IMPA is an owner and operator of
transmission facilities in Indiana, jointly operated by
PSI Energy Inc., IMPA and Wabash Valley Power
Association, all having an operating voltage of 69,000
volts or higher;  and,

0.06 WHEREAS,  IPL owns and operates 138,000 and 345,000
volt transmission facilities in central and southern
Indiana.

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

                        ARTICLE 1

                       DEFINITIONS

1.01 Out-of-Pocket Cost. Out-of-Pocket Cost shall mean
those costs of generating electric energy in the
generating stations of the system of either Party which
are incurred by the supplying system directly by reason
of its generating of such energy and which, otherwise,
would not have been incurred by such system.  Out-of-
Pocket Cost of electric energy purchased from a source
outside of the system of the supplying Party will be the
total amount paid therefor by the supplying Party which,
otherwise, would not have been paid by such Party.

1.02 Joint Transmission System.  The Joint Transmission
System shall be the transmission facilities owned in
common tenancy and jointly operated by PSI Energy, Inc.,
IMPA, and Wabash Valley Power Association functionally
serving as transmission facilities and having an
operating voltage of 69 kV or higher.

1.03 Joint Transmission System Agreement.      The Joint
Transmission System Agreement is the Transmission And
Local Facilities Ownership, Operation And Maintenance
Agreement between Public Service Company Of Indiana, Inc.
and Wabash Valley Power Association, Inc.  and Indiana
Municipal Power Agency dated as of November 5, 1985 as
amended.

                        ARTICLE 2

           PROVISIONS REGARDING CONTINUITY AND

       INTERRUPTION OF INTERCONNECTION OPERATIONS

2.01 Representations as to Facilities and Equipment.

     2.01.1         IPL Representation.  IPL hereby
     represents that it owns and controls all the
     transmission, substation and metering facilities and
     equipment necessary to implement and carry out fully
     all the provisions, terms and conditions of this
     Agreement.

     2.01.2         IMPA Representation.  IMPA hereby
     represents that it owns or has the right to use the
     transmission, substation and metering facilities and
     equipment necessary to implement and carry out fully
     all the provisions, terms and conditions of this
     Agreement.

2.02 Synchronous Operation.  At the Point(s) of
Interconnection (hereinafter defined) throughout the
duration of this Agreement, subject to the provisions of
this Paragraph 2.02 and of Paragraph 2.03 hereinbelow,
IPL and IMPA systems shall be operated in continuous
synchronism.  If synchronous operation of the systems at
the Point(s) of Interconnection becomes interrupted
either manually or automatically due to reasons beyond
the control of either Party or due to scheduled
maintenance that has been agreed to by both Parties, the
Parties shall cooperate to remove the cause of such
interruption as soon as practicable and restore the
Point(s) of Interconnection to normal operating
conditions.  Neither Party shall be responsible to the
other for any damage or loss of revenue caused by such
interruption.

2.03 Interruption of Operation.  The Parties agree that
either of them may interrupt synchronous operation
through the Point(s) of Interconnection if either Party
determines that its facilities may be damaged due to
excessive loading, and such excess loading may be reduced
or alleviated by such interruption.  If such interruption
occurs, the Parties shall cooperate to remove the cause
of such excess loading as soon as practicable and restore
the Point(s) of Interconnection to normal operating
condition.  Neither Party shall be responsible to the
other for damage or loss of revenue caused by such
interruption.
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 herein described in the event
either Party determines that this interconnection
contributes to excessive loading and requests such
negotiation.

2.04 Maintenance of Equipment.  The Parties (In
accordance with Paragraphs 2.01  and 19.07) shall each
keep the lines, together with all associated equipment
and appurtenances that are located on their respective
sides of the Points of Interconnection (as delineated in
Article 5 hereinbelow), 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.

2.05 New Interconnections.  The Parties understand that
each of their transmission systems is interconnected with
the electric transmission systems of other electric
utility companies and each has contracted for other such
interconnections and may hereafter during the term of
this Agreement desire to make additional physical
interconnections with such companies or with other
electric utility companies.  Each such additional
physical interconnection with another electric utility
system will be discussed between the Parties and if, in
the opinion of either Party, the establishment of such
interconnection will cause unreasonable transfers of real
power or reactive power through either system during
normal parallel operations as a result of the proposed
additional interconnection, before such additional
interconnection is made, joint load studies shall be
conducted to determine the effect such interconnection
will have on the transmission systems of the Parties. If
the study results in a determination that the proposed
additional interconnection would cause unreasonable
transfers of real power or reactive power through the
electric transmission system of such Party or otherwise
impair the ability of such Party to carry out its own
obligations, then the Party proposing such additional
interconnection shall, before such proposed
interconnection is placed in service:

     2.05.1         Compensation for Use.  Compensate the
     other Party for the use of that portion of its
     facilities determined to be dedicated to the
     proposed additional interconnection; and/or

     2.05.2         Remedies.  Install and/or remove such
     equipment as reasonably may be necessary to avoid
     such unreasonable transfers of power or reactive
     power; or

     2.05.3         Abandonment.  Abandon the
     establishment of such additional interconnection.

2.06 Anderson and Richmond Interconnection Points.  The
Parties agree that, upon completion of construction by
IMPA of facilities at its Anderson and Richmond
combustion turbines, such points shall become new
interconnections with Third Parties without the need for
such further studies as provided in Paragraph 2.05.

                      ARTICLE 3

               SERVICES TO BE RENDERED

3.01 Interconnection Service Schedules.  It is the
purpose of the Parties to realize on an equitable basis,
all benefits practicable to be effected through
coordination in the operation and development of their
respective systems.  It is understood by the Parties that
such benefits may be realized under the stated terms and
conditions of the interconnection service schedules
below:

     3.01.1         Emergency Service.  The furnishing of
     mutual emergency and standby assistance, in
     accordance with Service Schedule A annexed hereto.

     3.01.2         Interchange Energy.  The interchange,
     sale, and purchase of energy to effect operating
     economies, in accordance with Service Schedule B
     annexed hereto.

     3.01.3         Short Term Power.  The sale and
     purchase of short-term electric power and energy
     available on the system of one Party and desired by
     the other Party, in accordance with Service Schedule
     C annexed hereto.

     3.01.4         Limited Term Power.  The sale and
     purchase of limited term power and energy available
     on the system of one Party and desired by the other
     Party, in accordance with Service Schedule D annexed
     hereto;

3.02 Services Provided in Service Schedules.  Inasmuch as
the specific services to be rendered in furtherance of
such purpose will vary, and the terms and conditions
applicable to such services may require modification from
time to time while this Agreement is in effect, it is
intended that, except as provided in Paragraph 3.05
below, such specific services and the terms and
conditions applicable thereto be set forth in service
schedules mutually agreed upon from time to time between
the Parties.  Such services schedules, until and unless
changed by such mutual agreement, shall be those provided
by Paragraph 3.03 below, each of which, while in effect,
shall be deemed to be a part of this Agreement.

3.03 Service Schedule Designations.  The respective
service schedules shall be designated as follows:

          I.   Service Schedule A - Emergency Service

          II.  Service Schedule B - Interchange Energy

          III. Service Schedule C - Short Term Power

          IV.  Service Schedule D - Limited Term Power

Such service schedules as agreed upon between the the
Parties are attached hereto, made a part hereof, and
marked Exhibits I, II, III, and  IV respectively.

3.04 Price Protection. Nothing in this Agreement shall
require either Party to purchase power or energy from a
Third Party and resell it to the other Party at a price
less than the total cost of supplying such purchased
power or energy.

3.05 Energy Scheduling. The receiving Party shall
schedule energy deliveries on an hourly basis with the
supplying Party by 12:00 o'clock Noon, E.S.T., of the day
before such energy is to be delivered; thereafter, the
supplying Party shall not be obligated to schedule energy
deliveries until the next day; provided, however, that
the Parties may schedule energy at such other times and
upon such other conditions and/or make such changes in
existing energy schedules as both Parties may agree upon.

3.06 Emissions Allowances.  The Federal Clean Air Act, as
amended, 42 U.S.C. 7401 et seq. (hereinafter referred to
as "Clean Air Act"), establishes certain annual maximum
sulfur dioxide levels for flue gases emitted by electric
generating units, including units operated by IPL, IMPA
and other electric utilities who may supply electric
energy for transactions under this Agreement.  The Clean
Air Act also created an emissions allowance system to
permit emissions of regulated pollutants.  The obligation
of obtaining and the cost of supplying and/or replacing
consumed sulfur dioxide and other atmospheric emission
allowances, if any, when allowance programs become
effective shall be the responsibility of the Party
purchasing the power and energy  unless as otherwise
mutually agreed by the Parties.  The Parties shall
establish, by mutual agreement, appropriate procedures to
carry out the provisions of this Paragraph 3.06.  Such
procedures shall be amended as necessary to remain in
compliance with all Federal Energy Regulatory Commission
("FERC") and Indiana Utility Regulatory Commission
("IURC") rules and regulations.

                        ARTICLE 4

                   SERVICE CONDITIONS

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

4.02 Control of Reactive Power Exchange.  It is intended
that neither Party shall be obligated to deliver reactive
power for the benefit of the other Party; also that
neither Party shall be obligated to receive reactive
power when to do so may introduce objectionable operating
conditions on their respective systems.  The Operating
Committee shall be responsible for the establishment from
time to time of operating procedures and schedules, in
respect of carrying reactive power 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 reactive power loads.  In discharging
such duties the Operating Committee shall recognize that
in the transmission and delivery of power and energy
hereunder the carrying of reactive power loads by either
Party, in harmony with sound engineering principles of
transmission operation with interconnected systems, is
subject to numerous variables contingent upon loading and
operating conditions that may exist simultaneously on
both systems.  The operating procedures and schedules so
set up by the Operating Committee shall be in accord with
such principles and shall require each Party to carry
reactive power loads at such times and in such amounts as
will be equitable to both Parties.

4.03 Control of Unscheduled Power and Energy Deliveries.
The Parties shall exercise reasonable foresight in
carrying out all matters related to the providing and
operating of their respective electric power resources so
as to minimize, to the extent practicable, deviations
between actual and scheduled deliveries of electric power
and energy between their systems.  The Parties shall
provide and install on their respective systems such
communication and telemetering facilities as are
essential to so minimize such deviations and, in
developing and executing operating procedures that will
enable the Parties to avoid, to the extent practicable,
deviations from scheduled deliveries, shall fully
cooperate with each other and with third parties whose
sytems are 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 it, unscheduled deliveries
of electric energy from one Party to the other may occur.
In such events, electric energy delivered hereunder shall
be settled for either by the return of equivalent energy
or by payment of the Out-of-Pocket Cost (such cost being
at the Point or Points of Interconnection set forth in
Paragraph 5.01 below, taking into account electrical
losses incurred from the source or sources of such energy
to said Point or Points) of electric energy delivered
hereunder to the supplying Party plus ten percent of such
cost.  If equivalent energy is returned, it shall be
returned at times when the load conditions of the Party
receiving it are substantially equivalent to the load
conditions of such Party at the time the energy for which
it is returned was delivered or, if such Party elects to
have equivalent energy returned under different
conditions, it shall be returned in such amounts, to be
agreed upon by the Operating Committee, as will
compensate such Party for the difference in conditions.

                        ARTICLE 5

     DELIVERY POINTS, METERING POINTS, AND METERING

5.01 Points of Interconnection.

     5.01.1    Delivery Points.  All electric energy
     delivered under this Agreement shall be of the
     character commonly known as three-phase sixty hertz
     energy and shall be delivered at the established
     point(s) of interconnection listed below ("Points of
     Interconnection"):

          The Petersburg Substation of IPL, the Sunnyside
     Substation of IPL, the Five Points Substation of PSI
     Energy Inc., the Centerton Substation of PSI Energy
     Inc., and the Whitestown Substation of PSI Energy
     Inc. .

     5.01.2    Third Party Delivery Points.  In addition
     to the Point(s) of Interconnection, IPL and IMPA
     have interconnections with several utilities, each
     such utility being hereinafter referred to as a
     "Third Party". The Parties shall provide in advance
     to one another an information copy of each Third
     Party transmission agreement(s)

5.02 Billing Based on Scheduled Transactions. As IPL and
IMPA systems are interconnected with other systems
forming a network, it is recognized that, because of the
physical and electrical characteristics of facilities
involved, a part or all the energy being transferred from
one Party to the other may flow through the Point or
Points of Interconnection between the systems of the
Parties.  A part or all of the energy 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.

5.03 Metering Points.  Electric power and energy supplied
under this Agreement shall be measured by suitable
metering equipment, at the voltages and metering points
specified below ("Metering Points") and at such other
points, voltages, and ownership as may be agreed upon by
the Parties in a written amendment hereto:

     5.03.1    Petersburg 345kV Meters.  345 kV meters
     owned by IPL at the Petersburg Substation of IPL.

     5.03.2    Petersburg 138 kV Meters.  138 kV meters
     owned by IPL at the Petersburg Substation of IPL.

     5.03.3    Whitestown 345 kV Meters.  345 kV meters
     owned by IPL at the Whitestown Substation of PSI.
     Energy Inc. .

     5.03.4    Five Points 138 kV Meters.  138 kV meters
     owned by PSI at the Five Points Substation of PSI
     Energy Inc. .

     5.03.5    Centerton 138 kV Meters.  138 kV meters
     owned by PSI at the Centerton Substation of PSI
     Energy Inc. .

     5.03.6    Sunnyside 345 kV Meters.  345 kV meters
     owned by IPL at the Sunnyside Substation of IPL.

5.04 Metering Equipment.  Suitable metering equipment at
the metering points provided in Paragraph 5.03 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:  a continuous automatic graphic
record of both kilowatts and kilovars; an automatic
record of the kilowatthours for each clock hour; and a
continuous integrating record of the kilowatthours.

5.05 Measurement of Electric Energy.   Measurement of
electric energy under this Agreement shall be made by
standard types of electric meters installed and
maintained by the owner of the devices at the Metering
Points.  The timing devices of meters shall be
synchronized as closely as practical.  All meters shall
be sealed, and the seals shall be broken only when the
meters are to be tested or adjusted.

5.06 Access to Meters and Records.  Authorized
Representatives (hereinafter defined) of both Parties
shall have reasonable access to the premises where their
meters are located and to the records made by the meters.

5.07 Meter Testing.  The owner of the respective metering
facilities shall routinely test or have tested the above-
referenced meters and shall maintain records of meter
accuracy all in accordance with prudent utility
practices.  Each Party shall have the right, at its
expense, to require that the other Party conduct a
special test of its meters as soon as practicable;
provided, that if such test shows the meter to be more
than two percent (2%) inaccurate, the Party owning the
meter shall bear the cost of such test.  Representatives
of both Parties shall be notified and afforded the
opportunity to be present at all routine or special tests
and whenever any readings are taken from meters not
providing an automatic record.  Both Parties shall be
provided with a schedule of routine testing dates for
metering equipment which measures transactions entered
into pursuant to this Agreement.

5.08 Adjustments Due to Inaccuracies.  If any metering
equipment test discloses an inaccuracy exceeding two
percent (2%), the energy account between the Parties
shall be adjusted to correct for the inaccuracy disclosed
over the shortest of the following periods; (i) for the
six (6) month period immediately preceding the day of the
test, or (ii) for the period that such inaccuracy may be
determined to have existed, or (iii) if the last test
took place within the immediately preceding six month
period and the period of inaccuracy cannot be determined,
for the period since the last test.  Should the metering
equipment fail to register, the amount of electric power
and energy delivered shall be determined from the best
available data.

5.09 Metering Limitations.  Notwithstanding the metering
terms and conditions as provided in Article 5 the
Parties' rights are no greater than those terms and
conditions as provided in the various Third Party
agreements which provided those facilities not provided
by this Agreement.

                        ARTICLE 6

                 RECORDS AND STATEMENTS

6.01 Records.  In addition to records of the metering
provided for in Article 5 hereof, the Parties shall keep
complete records as may be needed to substantiate a clear
history of the various deliveries of electric energy
made, and of the clock-hour integrated demands in
kilowatthours delivered, by one Party to the other.  In
maintaining such records, the Parties shall effect such
segregation and allocation of demands and electric energy
delivered into classes representing the various services
and conditions as may be needed to effect settlements
under this Agreement.  All such records shall be retained
by the Party keeping the records.  A Party's records
shall be available at all reasonable times for inspection
by the other Party's Representative and may be copieds at
such other Party's expense.

6.02 Statements.  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 segregation as may be needed
for operating records or for settlements under this
Agreement.

                        ARTICLE 7

         BILLINGS, PAYMENTS AND BILLING DISPUTES

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

7.02 Billing Scheduled Transactions.    All billing shall
be based on scheduled transactions unless otherwise
determined as provided in Paragraph 5.02 hereof.

7.03 Billing Payments.  All bills for amounts owed by one
Party to the other shall be due and payable on the
fifteenth (15th) day of the month next following the
month in which the service was provided, or on the tenth
(10th) day after receipt of a bill therefor, whichever is
later.  Interest on unpaid amounts shall accrue at the
annual rate of two percent (2%) above the prime
commercial lending rate established from time to time by
The Chase Manhattan Bank, N.A., New York, New York (the
"Prime Lending Rate") and is payable from the date the
bill is due to the date of payment.  The term "month"
shall mean a calendar month for the purpose of
settlements under this Agreement.

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

7.05 Billing Disputes.  If either Party disputes the
correctness of a bill, it 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 decision.  Should the Operating
Committee be unable to reach a decision, the matter shall
be submitted to the President of IPL and the President of
IMPA for decision.  Any refund or additional payment
ordered by the Operating Committee or by the President of
IPL and the President of IMPA shall be subject to
interest computed at the Prime Lending Rate existing at
the time of the refund or additional payment plus two
percent (2%), said interest to be calculated, in the case
of a refund, from the date the amount to be refunded was
paid to the date of the refund and, in the case of an
additional amount ordered to be paid, from the original
due date to the payment date.  Unresolved billing
disputes shall be resolved in accordance with Paragraph
8.07 herein.
                        ARTICLE 8

                   OPERATING COMMITTEE

8.01 Operating Committee Organization And Duties.  To
coordinate the operation of the Parties' respective
generation, transmission and substation facilities in
order that the advantages to be derived under this
Agreement may be realized by the Parties hereto to the
fullest extent practicable, the Parties shall establish a
committee of authorized representatives to be known as
the Operating Committee.  Each Party shall designate in
writing delivered to the other Party, the person who is
to act as its representative on the Operating Committee
and each person who may serve as alternates whenever such
representative is unable to act ("Representatives").
Each of such Representatives shall be persons familiar
with the generation, transmission and substation
facilities of the system of the Party  represented, and
each shall be fully authorized (i) to cooperate with the
other Representatives and (ii) to determine and agree
from time to time, in accordance with this Agreement and
with any other relevant agreements then in effect between
the Parties, upon the following:

     8.01.1         Coordination of Maintenance.  All
     matters pertaining to the coordination of the
     maintenance of generation and transmission
     facilities of the Parties.

     8.01.2         Control of Operations.  All matters
     pertaining to the control of time, frequency, energy
     flow, reactive power exchange, power factor,
     voltage, and other similar matters bearing upon the
     satisfactory synchronous operation of the systems of
     the Parties.

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

8.02 Operating Committee Access.  For the purpose of
inspection and reading of meters, checking of pertinent
records and related matters (Subject to Paragraphs 2.01
and 19.07), the Representatives shall have the right of
access at any reasonable time to all facilities and
equipment of the Parties used or to be used in the
performance of this Agreement.

8.03 Operating Committee Expenses.  Each Party shall be
responsible for the expenses of its members; provided
that any expense jointly incurred by the Operating
Committee in performing its duties shall be shared
equally by the Parties.

8.04 Operating Committee Meetings.  The Operating
Committee shall meet at a time and place mutually agreed
upon by the Representatives.  On request of any
Representative, a meeting shall be arranged not more than
five working days after the request unless the Party
requesting the meeting agrees to a later date.
Attendance at the meetings shall not be limited to
Representatives; however, the Parties agree to limit
attendance of non-Representatives to those who are
expected to take an active part on the agenda for a given
meeting.
8.05 Agreement Not To Be Modified by Committee.  The
Operating Committee shall not have authority to modify
any of the terms or conditions of this Agreement.

8.06 Change of Representatives.  Each Party shall give
prompt written notice to the other Party of any change in
designation of its primary or alternate Representative on
the Operating Committee.

8.07 Unresolved Disputes.  If the Operating Committee is
unable to take action on any matter to be acted upon by
it under this Agreement because of a dispute between the
Representatives as to such matter, then the matter shall
be resolved by the following Procedure:

     8.07.1    Consultation.  In accordance with the
     provisions of Article 8 hereinabove, the members of
     the Operating Committee are authorized to  consult
     in connection with respect to any matter arising
     under this Agreement.

     8.07.2    Disagreement.  If a disagreement arises
     under this Agreement, pertaining to this Agreement,
     such matters shall be discussed by the Operating
     Committee and timely mutual agreement sought in
     regard thereto.  If all members of the Operating
     Committee agree to the resolution of any matter,
     such agreement shall be reported in writing and,
     within the scope of its power set forth in Article 8
     hereinabove, shall be binding upon the Parties.  In
     the event that all members of the Operating
     Committee are unable to reach agreement within a
     reasonable time on any matter being considered, the
     Presidents of either of the Parties may, by written
     notice to the members of the Operating Committee,
     withdraw such matter from further consideration by
     the Operating Committee and submit the same to the
     Chief Executive Officers of the Parties for
     resolution.  If the Chief Executive Officers of the
     Parties agree to a resolution of the matter, such
     agreement shall be reported in writing to, and shall
     be binding upon, the Parties; but if the Chief
     Executive Officers of the Parties fail to resolve
     the matter within forty five (45) days after being
     submitted  to them, then the matter shall proceed to
     arbitration as provided in this Article 8; provided
     that other dispute resolution procedures may be
     utilized by the Parties before arbitration, upon
     agreement of the Parties.

     8.07.3    Arbitration. Disagreements which are not
     resolved by the Operating Committee or the Chief
     Executive Officers of the Parties as provided in
     Article 8.07.02 may be settled by an Arbitration
     Board, (or by such other form of dispute resolution
     as agreed upon by the Parties) consisting of three
     arbitrators as hereinafter provided, in accordance
     with the provision of this Article 8.07.03.  A Party
     desiring arbitration,  shall serve written notice
     upon the other Party setting forth in detail the
     disagreement with respect to which arbitration is
     desired.  Such disagreement shall be settled by
     arbitration if, after receipt of such written
     notice, each of the Parties shall agree in writing
     that such disagreement shall be so settled.  Within
     a period of fifteen (15) days from the date of such
     agreement to settle such disagreement by
     arbitration, each Party shall select one arbitrator
     and the chosen arbitrators shall pick the third
     arbitrator.

     The arbitration proceedings shall be conducted in
     Indianapolis, Indiana unless otherwise mutually
     agreed.  The Arbitration Board shall afford adequate
     opportunity to each of the Parties to present
     information with respect to the disagreement
     submitted to arbitration and may request further
     information from the Parties.  Except as provided in
     the preceding sentence, the Parties may, by mutual
     agreement, specify the rules which are to govern any
     proceeding before the Arbitration Board and limit
     the matters to be considered by the Arbitration
     Board, in which event the Arbitration Board shall be
     governed by the terms and conditions of such
     agreement.  In the absence of any such agreement
     respecting the rules which are to govern any
     proceeding, the then current rules of the American
     Arbitration Association for the conduct of
     commercial arbitration shall govern the proceedings
     unless in conflict with Indiana Law, which shall
     control.

     Procedural matters pertaining to the conduct of the
     arbitration and the award of the Arbitration Board
     shall be made upon a determination of a majority of
     the arbitrators.  The Parties shall, however, be
     entitled to all discovery provided for by the
     Indiana Rules of Civil Procedure.  The findings and
     award of the Arbitration Board, so made upon a
     determination of a majority of the arbitrators,
     shall be final and conclusive with respect to the
     disagreement submitted for arbitration and shall be
     binding upon the Parties, except as otherwise
     provided by law.  Each Party shall pay the fee and
     expenses of the arbitrator selected by it, together
     with the costs and expenses incurred by it in the
     preparation of its case to the arbitrators and  the
     Parties shall split the costs of the third
     arbitrator equally.  Judgment upon the award may be
     entered in any court having jurisdiction.  In the
     event the Parties do not agree to arbitrate, each
     shall have the right to take appropriate judicial
     action.

8.08 Unanimous Action. All actions taken by said
Operating Committee must be by unanimous vote or consent
of all Operating Committee Representatives.

                        ARTICLE 9

          CONTINUITY AND SUSPENSION OF SERVICE,

                RELATIVE RESPONSIBILITIES

9.01 Continuity and Suspension of Service.  Each Party
shall exercise reasonable care and foresight to maintain
continuity of service as provided in this Agreement, but
neither Party shall be considered in Default (hereinafter
defined) in respect of any obligation hereunder if
prevented from fulfilling such obligation by reason of
Force Majeure as defined in Article 11 below.  In no
event shall either Party be liable to the other Party for
loss or damage arising from failure, interruption or
suspension of service. 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 suspensions in cases
where, in its sole opinion, the continuance of service to
the other Party would endanger person or property.  Both
Parties shall use their best efforts to provide each
other with reasonable notice in the event of suspension
of service.

9.02 Relative Responsibilities.  Each Party assumes all
responsibility for receipt and delivery of electricity on
its system to and from its Points of Interconnection.
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. Neither Party shall,
in any event, be liable 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
by the other Party of said electricity.  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 this
Agreement.

                       ARTICLE 10

                    TERM OF AGREEMENT

10.01     Effective Date.  The effective date of this
Agreement (the "Effective Date") shall be the date as of
which all conditions precedent set forth in Article 13
hereinbelow have been satisfied. Such Effective Date
shall be specified in a writing executed by both Parties.
The Parties agree to use their best efforts to support
and cooperate with each other to satisfy said conditions
precedent.

10.02     Term.  The term of this Agreement and of the
annexed Service Schedules shall begin on the Effective
Date and continue through December 31, 2010 ("Initial
Term"). The Agreement and Service Schedules shall
continue in effect for successive terms of three(3) years
each until terminated pursuant to notice given by either
Party to the other or otherwise terminated under
Paragraphs 12.02, 13.01, 18.01 or 19.03 hereof.  Any
notice of termination given hereunder shall be given in
writing, at least two (2) years prior to the end of the
Initial Term or any successive term, and may be delivered
at any time after the Effective Date of this Agreement;
provided, that this Agreement shall not be deemed to have
terminated until all prior commitments for sales or
purchases of power and energy under this Agreement have
been fullfilled and all payments therefor have been made.

                       ARTICLE 11

                      FORCE MAJEURE

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

                       ARTICLE 12

                         DEFAULT

12.01     Default Defined.  As used herein, "Default"
shall mean the failure of a Party to make any payment or
perform any obligation at the time and in the manner
required by this Agreement, except where such failure to
discharge obligations (other than the payment of money)
is the result of Force Majeure.  Failure to make any
payment in the time and manner required by this Agreement
shall not be excused as a Default by payment of late
charges except with respect to a Default cured in
accordance with the provisions in Paragraph 12.02 below.
It shall not be a default for a Party to make a partial
payment pursuant to invoking the billing dispute
procedures in Paragraph 7.05.

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

                       ARTICLE 13

          CONDITIONS PRECEDENT TO EFFECTIVENESS

               OF AGREEMENT AND AMENDMENTS

13.01     Conditions Precedent.    The effective Date of
this Agreement is conditional upon the  approval or
acceptance of this Agreement by the FERC and any other
regulatory authority or other governmental agency having
jurisdiction.  If any of the terms and conditions of this
Agreement are altered or made impossible of performance
by order, rule, or regulation of any such regulatory
agency and , as a result, the Parties 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 Party for
failure thereafter to comply with such terms and
conditions; provided, that if either Party deems that the
loss of benefits to be derived from this Agreement are
unduly burdensome, then this Agreement may be terminated
forthwith upon 30 days advance notice.

13.02     Cooperation with the FERC (Federal Energy
Regulatory Commission) Filing.  Both Parties recognize
and agree that this Agreement must be filed with the FERC
by IPL, and both Parties agree to cooperate with IPL's
request for acceptance for filing of this Agreement
without suspension by the FERC.  In this connection, both
Parties agree that each of them will execute any and all
documents, duly authorize all officers or agents as
necessary, and do all other things necessary and
appropriate to secure acceptance for filing of this
Agreement, including the terms and conditions and the
initial rates and charges hereof, by the FERC without
suspension, or change or modification in the terms
hereof.

13.03     Cooperation with IURC (Indiana Utility
Regulatory Commission)  Filing.  Both Parties recognize
and agree that this Agreement must be filed with the IURC
by IMPA, and both Parties agree to cooperate with IMPA's
request for acceptance for filing of this Agreement
without suspension by the IURC.  In this connection, both
Parties agree that each of them will execute any and all
documents, duly authorize all officers or agents as
necessary, and do all other things necessary and
appropriate to secure acceptance for filing of this
Agreement, including the terms and conditions and the
initial rates and charges hereof, by the IURC without
suspension, or change or modification in the terms
hereof.

13.04     Amendments.  Except as otherwise provided in
Article 19.02 below or in the provisions of the Service
Schedules, this Agreement may be amended only by mutual
agreement of the Parties, which amendment shall be in
writing and shall become effective upon satisfaction of
the Conditions Precedent in Article 13 applicable
thereto.

                       ARTICLE 14

       INDEMNIFICATION AND LIMITATION OF LIABILITY

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

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

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

                       ARTICLE 15

                          TAXES

15.01     Compensation For Taxes.  If at any time during
the term of this Agreement there should be levied or
assessed against either of the Parties any direct taxes
by any taxing authority on the power and/or energy
generated, purchased, sold, transmitted, interchanged, or
exchanged under this Agreement, which taxes are in
addition to or different from the forms of direct taxes
being levied or assessed on the date of this Agreement
and such direct taxes results in increasing the cost to
either or both Parties of carrying out the provisions of
this Agreement, then the rates and charges for such power
and/or energy furnished hereunder shall be increased
automatically to the extent necessary to make adequate
and equitable allowance for such taxes.

                       ARTICLE 16

                         WAIVERS

16.01     Waiver Rights.  Any waiver by either Party of
its rights under this Agreement, shall not be deemed a
waiver with respect to any rights that subsequently
accrue.  Any delay, less than the statutory period of
limitations, in asserting or enforcing any rights under
this Agreement, shall not be deemed a waiver of such
rights.

                       ARTICLE 17

                        INSURANCE

17.01     Insurance Responsibilities.  Each Party shall
be responsible for the procurement and maintenance of its
own property, casualty and third-party liability
insurance to adequately protect its personnel and
property and to cover its liabilities and
responsibilities under this Agreement.

                       ARTICLE 18

                       ASSIGNMENT

18.01     Assignment of Agreement.  This Agreement shall
inure to the benefit of, and be binding upon, the
respective successors and assigns of the Parties and,
insofar as permitted by law, on any trustee appointed for
a Party under the United States Bankruptcy Code; and this
Agreement may not be assigned by either Party, without
the written consent of the other Party, which consent
shall not be unreasonably withheld.  In the event either
Party is liquidated or dissolved as a corporation or
otherwise terminates its business operations, this
Agreement shall become null and void and all obligations
under this Agreement and the Service Schedules, except
financial obligations incurred prior to the receipt of
notice of such event, shall cease upon the date of such
notice.

                       ARTICLE 19

                      MISCELLANEOUS

19.01     Prudent Utility Practices.  The Parties shall
discharge all obligations under this Agreement in
accordance with prudent utility practices.

19.02     Change in Rates.  Nothing herein shall be
construed as affecting, in any way, the right of IMPA or
IPL to unilaterally make a change in its rates or charges
applicable to the furnishing of service by IMPA or IPL
under this Agreement, under Section 205 of the Federal
Power Act and pursuant to the FERC's Rules and
Regulations promulgated thereunder, or under Indiana Code
8-1-2.2-1 et seq. pursuant to the IURC's Rules and
Regulations as respectively applicable to the Parties;
provided, that either Party may intervene and fully
participate in any such proceeding instituted by the
other Party pursuant to this paragraph in the manner and
to the extent permitted by the FERC or the IURC, as
respectively applicable.

19.03     No Partnerships; Tax Matters.  Notwithstanding
any provision of this 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 this Agreement to the contrary
which has an adverse tax effect on either Party shall
render this Agreement null and void from its inception.

19.04     Survivorship Of Certain Obligations.
Notwithstanding Paragraph 19.03 above, the termination or
voidance of this Agreement shall not discharge any Party
from any obligation it owes to the other Party under this
Agreement by reason of any transaction, loss, cost,
damage, expense or liability which shall have occurred or
arisen after the Effective Date of this Agreement, but
prior to such termination or voidance.  It is the intent
of the Parties that should this Agreement be terminated
or voided under Paragraph 19.03 above or any other
paragraph hereof , the satisfaction of any such
obligation and the provisions for indemnification and
limited liability of Article 14 above shall constitute a
separate agreement between the Parties that is severable
from this Agreement and, as such, shall remain in full
force and effect for actions that occurred prior to the
notice of termination or voidance of this Agreement.

19.05     Computation of Time.  In computing any period
of time prescribed or allowed by this 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.

19.06     Paragraph Headings Not to Affect Meaning.  The
descriptive headings of the Articles and paragraphs of
this Agreement have been inserted for convenience only
and shall not modify or restrict any of the terms and
provisions thereof.

19.07     IMPA's Rights under the Joint Transmission
System Agreement.  IMPA through its rights in the Joint
Transmission System, shall be responsible for taking all
steps to pursue in good faith, its rights under the Joint
Transmission System Agreement, to satisfy IMPA's
responsibilities under this Agreement.

                       ARTICLE 20

                         NOTICES

20.01     Notices Relating to Provisions of this
Agreement.  Any notice, demand or request made by a Party
to the other Party pursuant to any provision of this
Agreement shall be made in writing and shall be delivered
in person, by registered or certified mail to the named
officer of the Party at the address listed below;
provided, that either Party may, from time to time,
change such designated officer or the address thereof by
giving written notice of such change to the other Party.

TO IPL:
          President
          Indianapolis Power & Light Company
          P. O. Box 1595
          Indianapolis, Indiana 46206-1595

TO IMPA:
          President
          Indiana Municipal Power Agency
          11610 North College Avenue
          Carmel, Indiana 46032

20.02     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 FAX as circumstances dictate, to
a Representative; 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 21

       GOVERNING LAW AND CONSTRUCTION OF AGREEMENT

21.01     This Agreement shall be governed by and
construed according to the laws of the State of Indiana.

                       ARTICLE 22

            ENTIRE AGREEMENT CONTAINED HEREIN

22.01     This is the entire agreement between the
Parties and no oral or other written representations
shall have the affect of amending or modifying this
Agreement.

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

INDIANAPOLIS POWER & LIGHT COMPANY

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

ATTEST:

By /s/Marcus E. Woods

Marcus E. Woods, Vice President,
Secretary and General Counsel

INDIANA MUNICIPAL POWER AGENCY

By /s/ Raj G. Rao
President

ATTEST:

By /s/ Robert J. Clifford
Robert J. Clifford
Vice President and Assistant Secretary

                   SERVICE SCHEDULE A

                    EMERGENCY SERVICE

Under Interconnection Agreement dated August 19, 1994
between Indianapolis Power & Light Company and Indiana
Municipal Power Agency  (the "Agreement").

SECTION 1 - DEFINITIONS

1.1  The meaning of the terms used herein shall be the
same as those used in this Agreement.

SECTION 2 - DURATION

2.1  This Service Schedule shall become effective as of
the Effective Date of this Agreement and shall continue
in effect throughout the duration of this Agreement.

SECTION 3 - SERVICES TO BE RENDERED

3.1  Conditional Service.  Subject to the provisions of
Subsection 3.2 of this Section 3, 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 that it
is requested to deliver; provided, however, that neither
Party shall 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
neither Party shall be obligated to deliver electric
energy to the other for a period in excess of forty-eight
(48) consecutive hours during any single emergency.

3.2  Non-performance.  The Parties recognize that the
delivery of electric energy as provided in Subsection 3.1
of this Section 3 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 3.1, 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 it is unable to comply with the provisions
of said Subsection 3.1.  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 3.1; 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 3.1 available to the other Party hereto as
soon as possible.
3.3  Reserve Generating Capacity Review.  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 3.1, 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
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 Party.  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 4 - COMPENSATION

4.1  When IPL is the Supplying Party:

     4.11 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 Article 5.0 of
     this 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.

     4.12 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.

4.2  When IMPA is the Supplying Party:

     4.21 Emergency Energy delivered that is generated by IMPA
     shall be settled for, at the option of IMPA, either by the
     return of equivalent energy at a mutually acceptable time
     upon request of IMPA or by payment of the great of (a) 110%
     of the Out-Of-Pocket Cost (such cost being as of the
     delivery point or points, as referred to in Article 5.0 of
     this 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.

     4.22 Emergency Energy delivered that is purchased by IMPA
     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 IMPA, plus an amount to be agreed upon by the
     Parties at the time of the transactions of up to 4.5 mills
     per kilowatt-hour (consisting of up to 3.5 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 IMPA's
     system on account of the transaction, and plus any taxes
     incurred by IMPA on account of the transaction.

4.3  If the option of returning electric energy under Subsection
4.11 or 4.21 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 this Agreement, as will compensate
either Party for the difference in conditions.

                       MODIFICATION NO. 1
                             TO THE
                   INTERCONNECTION AGREEMENT
                            BETWEEN
               INDIANAPOLIS POWER & LIGHT COMPANY
                              AND
                 INDIANA MUNICIPAL POWER AGENCY

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 Municipal Power Agency ("Buyer") and IPL dated August 19,

1994 (the "Agreement").

                          WITNESSETH:

WHEREAS, IPL and Indiana Municipal Power Agency entered into the

Agreement on August 19, 1994;

WHEREAS, the Agreement provides for the sale of power and energy

by IPL under Service Schedules described as:

Service Schedule A                 Emergency Service

Service Schedule C                 Interchange Energy

Service Schedule D                 Short Term Power

Service Schedule E                 Limited Term Power

WHEREAS, the Agreement provides for the recovery of

incremental costs or "out-of-pocket" costs occasioned by

the sale by IPL of electric energy;

WHEREAS, IPL has implemented its Emissions Constrained

Dispatch Plan, attached hereto;

WHEREAS, the rates for Emergency Service, Interchange

Energy, Short Term Power and Energy, and Limited Term

Power, do not expressly include the cost of replacing

sulfur dioxide ("SO2") emission allowances expended in

order to provide such energy in compliance with Federal

laws governing SO2 emission;

WHEREAS, IPL desires to amend the Agreement to clarify

recovery of out-of-pocket costs occasioned by the sale of

said energy as including the recovery of the incremental

cost of SO2 emission allowances;

NOW, THEREFORE, in consideration of the premises and the

terms and conditions set forth herein; IPL desires to

amend the Agreement as follows:

Section 1.     Compensation for SO2 Emission Allowances.

The Buyer shall compensate IPL for the consumption of

Sulfur Dioxide Emissions Allowances ("SO2 Allowances")

directly attributed to electric energy sales by IPL to

Buyer under the Service Schedules.  Such compensation

shall, at Buyer's option, be made by either supplying IPL

with the number of SO2 Allowances directly attributed to

such energy sales, or by reimbursing IPL for the

incremental cost of such number of SO2 Allowances,

rounded to the nearest whole SO2 Allowance.

If Buyer opts to reimburse IPL in cash for SO2 Allowances

associated with Buyer's energy purchases for the month,

the cash amount due at billing will be determined by

multiplying the number of SO2 Allowances attributed to

the sale by the incremental cost of the SO2 Allowances,

as determined in Section 2.2, at the time of the sale.

If Buyer opts to reimburse IPL in SO2 Allowances, Buyer

will record or transfer to IPL's account, the number of

SO2 Allowances calculated below, at the time cash

settlement for the energy is due.  In all cases, Buyer

will transfer to IPL's account the number of SO2

Allowances due IPL for calendar year no later than

January 15 of the following year.  "Transfer to IPL's

account" shall mean, for purposes of the Amendment, the

transfer by the USEPA of the requisite number of SO2

Allowances to IPL's Allowance Tracking System account and

the receipt by IPL of the Allowance Transfer

Confirmation.

Section 2.     Determination of SO2 Emission Allowances

Due IPL.

     Section 2.1.   Number of SO2 Allowances

     The number of SO2 Allowances directly attributed to

     an energy sale made by IPL shall be determined for

     each hour, by determining the contribution from each

     of the unit(s) from which the energy sale is being

     made for that hour.  For each unit, the emission

     rate in pounds of SO2 per million Btu will be

     determined each month, from fuel sulfur content,

     control equipment performance, and continuous

     emissions monitoring data.  The emission rate and

     the unit heat rate will be used to determine the SO2

     Allowances used per megawatt-hour ("MWH").  The

     energy from each unit attributable to the sale, and

     the SO2 Allowances per MWH for each unit, will be

     used to determine the number of SO2 Allowances

     attributable to the sale.

     Section 2.2 .  Cost of SO2 Allowances

     The incremental SO2 Allowance cost used to determine

     economic dispatch of IPL's generating units in any

     month, will also be the basis used to determine

     compensation for IPL's energy sales.  The

     incremental SO2 Allowances cost, in dollars per ton

     of SO2, shall be determined each month and will be

     based on the Cantor Fitzgerald offer  price for SO2

     Allowances, or if such is not available, 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

                   MODIFICATION NO. 2

                         TO THE

                INTERCONNECTION AGREEMENT

                         BETWEEN

           INDIANAPOLIS POWER & LIGHT COMPANY

                           AND

             INDIANA MUNICIPAL POWER AGENCY

                     Effective as of

                   MODIFICATION NO. 2
                         TO THE
                INTERCONNECTION AGREEMENT
                         BETWEEN
           INDIANAPOLIS POWER & LIGHT COMPANY
                           AND
             INDIANA MUNICIPAL POWER AGENCY

     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
            Service Schedule D - Limited Term Power

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 Modification.

     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
Modification.

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 Municipal Power Agency 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 Modification No. 2
to govern transmission service to Indiana Municipal Power
Agency for power sales, and charges for transmission and
ancillary services for any power sale will be assessed to
Indiana Municipal Power Agency under the Open Access
Transmission Tariff.

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