10-K

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                            FORM 10-K
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
                               OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________     
to ________________________________ 

                  Commission File Number 1-3553
            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
     (Exact name of registrant as specified in its charter)
Indiana                                 35-0672570
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)          Identification No.)

20 N.W. Fourth Street, Evansville, Indiana   47741-0001
(Address of principal executive office)      (Zip Code)

Registrant's telephone number, including area code:  (812)
465-5300

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class                     which registered    

Common Stock, Without Par Value      New York Stock Exchange
Rights to Purchase Preferred Stock,
 No Par Value, Series 1986           New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

           Cumulative Preferred Stock, $100 Par Value
                        (Title of Class)

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [X] 

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
                       Yes [X]   No [ ]   

State the aggregate market value of the voting stock held by
non-affiliates of the registrant:  $471,341,191 at February
28, 1994, including 185,895 shares of Preferred Stock, $100
Par Value.

Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date:

                                        Outstanding as of
Class                                   February 28, 1994

Common Stock, Without Par Value              15,705,427

Documents incorporated by reference (to the extent indicated
herein):
                                Part of Form 10-K into which
Document                          document is incorporated  

Proxy Statement dated February 22, 1994 relating to the
 1994 Annual Meeting of Stockholders         Part III


 1
                             PART 1

Item 1.  BUSINESS

GENERAL

     Southern Indiana Gas and Electric Company (Company) is
an operating public utility incorporated June 10, 1912,
under the laws of the State of Indiana, engaged in the
generation, transmission, distribution and sale of electric
energy and the purchase of natural gas and its
transportation, distribution and sale in a service area
which covers ten counties in southwestern Indiana.  The
Company has a wholly-owned nonutility investment subsidiary,
Southern Indiana Properties, Inc. (refer to Note 3 of the
Notes To Consolidated Financial Statements, page 35, for
further discussion).

     Electric service is supplied directly to Evansville and
74 other cities, towns and communities, and adjacent rural
areas.  Wholesale electric service is supplied to an
additional nine communities.  At December 31, 1993, the
Company served 118,163 electric customers, and was also
obligated to provide for firm power commitments to the City
of Jasper, Indiana, and to maintain spinning reserve margin
requirements under an agreement with the East Central Area
Reliability Group (ECAR).

     At December 31, 1993, the Company supplied gas service
to 100,398 customers in Evansville and 63 other nearby
communities and their environs.  Since 1986, the Company has
purchased its natural gas supply requirements from numerous
suppliers.  During 1993, twenty-five suppliers were used;
however, Texas Gas Transmission Corporation  (TGTC) remained
the Company's primary contract supplier.  In November 1993,
TGTC restructured its services so that its gas supplies are
sold separately from its interstate transportation services. 
TGTC ceased to be a supplier of natural gas to the Company,
and the Company assumed full responsibility for the purchase
of all its natural gas supplies.  (See subsequent reference
under "Gas Business" to the restructuring of interstate
pipelines.)  During 1993, eighteen of the Company's major
gas customers took advantage of the Company's gas
transportation program to procure a portion of their gas
supply needs from suppliers other than the Company.

     The principal industries served by the Company include
aluminum smelting and recycling, aluminum sheet products,
polycarbonate resin (Lexan) and plastic products, appliance
manufacturing, pharmacuetical and nutritional products,
automotive glass, gasoline and oil products, and coal
mining.

     The only property the Company owns outside of Indiana
is approximately eight miles of 138,000 volt electric
transmission line which is located in Kentucky and which
interconnects with Louisville Gas and Electric Company's
transmission system at Cloverport, Kentucky.  The original
cost of the property is less than $425,000.  The Company
does not distribute any electric energy in Kentucky.

LINES OF BUSINESS

     The percentages of operating revenues and operating
income before income taxes attributable to the electric and
gas operations of the Company for five years ended December
31, 1993, were as follows:


                                    Year Ended December 31,
                         1989      1990      1991      1992      1993
                                                  
Operating Revenues:                                              
     Electric            79.6%     80.6%     81.8%     79.5%     78.7%
     Gas                 20.4      19.4      18.2      20.5      21.3
                                                       
Operating Income Before Income Taxes:                            
                         
     Electric            98.6%     93.0%     97.4%     99.0%     99.4%
     Gas                  1.4       7.0       2.6       1.0        .6

     Reference is made to Note 12 of the Notes To
Consolidated Financial Statements, page 38, for Segments of
Business data.


 2
ELECTRIC BUSINESS

     The Company supplies electric service to 118,163
customers, including 103,318 residential, 14,645 commercial,
177 industrial, 19 public street and highway lighting and
four municipal customers.

     The Company's installed generating capacity as of
December 31, 1993 was rated at 1,238,000 kilowatts (Kw). 
Coal-fired generating units provide 1,023,000 Kw of capacity
and gas or oil-fired turbines used for peaking or emergency
conditions provide 215,000 Kw.

     In addition, the Company has interconnections with
Louisville Gas and Electric Company, Public Service Company
of Indiana, Inc., Indianapolis Power & Light Company,
Hoosier Energy Rural Electric Cooperative, Inc.,  Big Rivers
Electric Corporation, and the City of Jasper, providing an
ability to simultaneously interchange approximately 750,000
Kw.

     Record-breaking peak conditions occurred on July 28,
1993, when the Company's system summer peak load of
1,012,700 Kw was 6.5% greater than the previous record
system summer peak load of 951,200 Kw established August 17,
1988.  The Company's total load obligation for each of the
years 1989 through 1993 at the time of the system summer
peak, and the related capacity margin, are presented below. 
The Company's other load obligations at the time of the peak
included firm power commitments to Alcoa Generating
Corporation (AGC) except as noted, the City of Jasper,
Indiana, and the Company's reserve margin requirements under
the ECAR agreement.



                                               
Date of Summer Peak Load
      08-28-89   07-09-90       07-22-91      07-13-92        07-28-93

Company System Peak Load (Kw)
        884,900    942,700        948,400       916,700       1,012,700

Other Load Obligations at Peak (Kw)
         84,100      70,800    77,480    75,190    87,340

Total Load Obligations at Peak (Kw)
        969,000  1,013,500      1,025,880       991,890       1,100,040

Total Generating Capability (Kw)
      1,167,000  1,163,000      1,238,000  1,238,000  1,238,000

Capacity Margin at Peak
            17%        13%            17%            20%             11%

 Effective February 1, 1990, the Company had no firm
power commitments to AGC.
 Includes 80,000 Kw gas-fired turbine placed in service
May 31, 1991.

     The all-time record system winter peak load of 771,900
Kw occurred during the 1989-1990 season on December 22,
1989, and was 10.8% greater than the 1992-1993 winter season
system peak (the second highest winter peak) reached on
February 18, 1993 at 696,800 Kw.

     The Company, primarily as agent of AGC, operates the
Warrick Generating Station, a coal-fired steam electric
plant which interconnects with the Company's system and
provides power for the Aluminum Company of America's Warrick
Operations, which includes aluminum smelting and fabricating
facilities.  Of the four turbine generators at the plant,
Warrick Units 1, 2 and 3, with a capacity of 144,000 Kw
each, are owned by AGC.  Warrick Unit 4, with a rated
capacity of 270,000 Kw, is owned by the Company and AGC as
tenants in common, each having shared equally in the cost of
construction and sharing equally in the cost of operation
and in the output.

     The Company (a summer peaking utility) has an agreement
with Hoosier Energy Rural Electric Cooperative, Inc.
(Hoosier Energy) for the sale of firm power to Hoosier
Energy during the annual winter heating season (November 15-
March 15).  The contract made available 100 Mw during the
1993-1994 winter season, and allows for a possible increase
to 250 Mw by November 15, 1998.  The contract will terminate
March 15, 2000.

     Electric generation for 1993 was fueled by coal (99.8%)
and natural gas (.2%).  Oil was used only to light fires and
stabilize flames in the coal-fired boilers and for testing
of gas/oil fired peaking units.

     Historically, coal for the Company's Culley Generating
Station and Warrick Unit 4 has been purchased from operators
of nearby Indiana strip mines pursuant to long-term
contracts.  During 1991, the Company pursued negotiations
for new contracts with these mine operators and while doing
so, purchased coal from the respective operators under
interim agreements.  In October 1992, the Company finalized
a new supply agreement effective through 1995 and
retroactive to 1991, with one of the operators under which
coal is supplied to both locations.  Included in the
agreement was a provision whereby the contract could be

 3
reopened by the Company for modification of certain coal
specifications.  In early 1993, the Company reopened the
contract for such modifications.  Effective July 1, 1993,
the Company bought out the remainder of its contractual
obligations with the supplier, enabling the Company to
acquire lower priced spot market coal.  The Company
estimates the savings in coal costs during the 1991-1995
period, net of the total buyout costs, will approximate $56
million.  The net savings are being passed back to the
Company's electric customers through the fuel adjustment
clause.  The coal supplier retained the right of first
refusal to supply Warrick Unit 4 and the Culley plant during
the years 1996-2000.  (See "Rate and Regulatory Matters" of
Item 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, page 15, for further
discussion of the contract buyout.)  The Indiana coal used
in these plants is blended by the vendor and delivered to
the plants to meet quality specifications set in conformance
with the requirements of the Indiana State Implementation
Plan for sulfur dioxide.  Approximately 1,572,000 tons of
coal were used during 1993 in the generation of electricity
at the Culley Station and Warrick Unit 4.  (See discussion
under "Environmental Matters", page 7.)  For supplying the
A. B. Brown Generating Station, the Company has a contested
agreement, possibly extending to 1998, with an area
producer.  (See Item 3, LEGAL PROCEEDINGS, page 10 for
discussion of litigation with this producer regarding the
coal supply agreement.)  The amount of coal burned at A. B.
Brown Generating Station during 1993 was approximately
862,000 tons.  Both units at the generating station are
equipped with flue gas desulfurization equipment so that
coal with a higher sulfur content can be used.  There are
substantial coal reserves in the southern Indiana area.  The
average cost of coal consumed in generating electrical
energy for the years 1989 through 1993 was as follows:


                                                 Average Cost
                   Average Cost   Average Cost     Per Kwh
       Year          Per Ton       Per MMBTU      (In Mills)
                                           
       1989          $32.13          $1.44          15.36
       1990           34.71           1.54          16.55
       1991           33.01           1.46          15.87
       1992           32.04           1.42          15.30
       1993           32.56           1.46          15.66


     The Broadway Turbine Units 1 and 2, Northeast Gas
Turbines and A. B. Brown Gas Turbine, when used for peaking,
reserve or emergency purposes, use natural gas for fuel. 
Number 2 fuel oil can also be used in the Broadway Turbine
Units and the Brown Gas Turbine.

     All metered electric rates contain a provision for
adjustment in charges for electric energy to reflect changes
in the cost of fuel and the net energy cost of purchased
power through the operation of a fuel adjustment clause
unless certain criteria contained in the regulations are not
met.  The principal restriction to recovery of fuel cost
increases is that such recovery is not allowed to the extent
that operating income for the twelve month period provided
in the fuel cost adjustment filing exceeds the operating
income authorized by the Indiana Utility Regulatory
Commission (IURC) in the latest general rate case of the
Company.  During 1991-1993, this restriction did not affect
the Company.  As prescribed by order of the IURC, the
adjustment factor is calculated based on the estimated cost
of fuel and the net energy cost of purchased power in a
designated future quarter.  The order also provides that any
over- or underrecovery caused by variances between estimated
and actual cost in a given quarter will be included in the
second succeeding quarter's adjustment factor.  This
continuous reconciliation of estimated incremental fuel
costs billed with actual incremental fuel costs incurred
closely matches revenues to expenses.

     The Company's primary goal in the area of research and
development is cost savings through the use of new
technologies.  This is accomplished, in part, through the
efforts of the Electric Power Research Institute (EPRI).  In
1993, the Company paid $893,000 to EPRI to help fund
research and development programs such as advanced clean
coal burning technology.

     The Company is participating with 14 other electric
utility companies, through Ohio Valley Electric Corporation
(OVEC) in arrangements with the United States Department of
Energy (DOE), to supply the power requirements of the DOE
plant near Portsmouth, Ohio.  The sponsoring companies are
entitled to receive from OVEC, and are obligated to pay for
the right to receive, any available power in excess of the
DOE contract demand.  The proceeds from the sale of power by
OVEC are designed to be sufficient to meet all of its costs
and to provide for a return on its common stock.  During
1993, the Company's participation in the OVEC arrangements
was 1.5%.

 4
     The Company participates with 32 other utilities,
located in eight states comprising the east central area of
the United States, in the East Central Area Reliability
Group, the purpose of which is to strengthen the area's
electric power supply reliability.

GAS BUSINESS

     The Company supplies natural gas service to 100,398
customers, including 91,476 residential, 8,682 commercial,
236 industrial and four public authority customers, through
2,520 miles of gas transmission and distribution lines.

     The Company owns and operates three underground gas
storage fields with an estimated ready delivery from storage
of 3.9 million Dth of gas.  Natural gas purchased from the
Company's suppliers is injected into these storage fields
during periods of light demand which are typically periods
of lower prices.  The injected gas is then available to
supplement the normal contract volume from the pipeline
during periods of peak requirements.  It is estimated that
approximately 119,000 Dth of gas per day can be withdrawn
from the three storage fields during peak demand periods on
the system.

     The gas procurement practices of the Company and
several of its major customers have been altered
significantly during the past eight years as a result of
changes in the natural gas industry.  In 1985 and prior
years, the Company purchased nearly its entire gas
requirements from Texas Gas Transmission Corporation (TGTC)
compared to 1993 when a total of 25 suppliers sold gas to
the Company.  In total, the Company purchased 17,270,415 Dth
in 1993.  Of this amount, 5,046,509 Dth, or 29%, was
purchased from TGTC, which continued to be the Company's
largest supplier and its major pipeline.  In November 1993,
TGTC restructured its services so that its gas supplies are
sold separately from its interstate transportation services. 
TGTC ceased to be a supplier of natural gas to the Company,
and the Company assumed full responsibility for the purchase
of all its natural gas supplies.  (See subsequent reference
under "Gas Business" to the restructuring of interstate
pipelines.)  During 1993, eighteen of the Company's major
gas customers took advantage of the Company's gas
transportation program to procure a portion of their gas
supply needs from suppliers other than the Company.  A total
of 11,370,542 Dth was transported for these major customers
in 1993 compared to 9,497,059 Dth transported in 1992.  The
Company received fees for the use of its facilities in
transporting such gas, allowing it to offset a portion of
the loss of its customary sales margin with respect to these
customers.

     (See "Rate and Regulatory Matters" in Item 7,
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, page 15 of this report,
for discussion of the Company's general adjustment in gas
rates and for discussion of the FERC Order No. 636 which
requires interstate pipelines to restructure their services
so that gas supplies will be sold separately from interstate
transportation services.)

     The all-time record send out occurred during the 1989-
1990 winter season on December 22, 1989, when 223,489 Dth of
gas was delivered to the Company's customers.  Of this
amount, 89,614 Dth was purchased, 104,358 Dth was taken out
of the Company's three underground storage fields, and
29,517 Dth was transported to customers under transportation
agreements.  The 1992-1993 winter season peak day send out
was 189,717 Dth on February 17, 1993.

     The average cost per Dth of gas purchased by the
Company during the past five calendar years was as follows: 
1989, $2.84; 1990, $2.84; 1991, $2.71; 1992, $2.77; and 1993
$2.85.

     The State of Indiana has established procedures which
result in the Company passing on to its customers the
changes in the cost of gas sold unless certain criteria
contained in the regulations are not met.  The principal
restriction to recovery of gas cost increases is that such
recovery is not allowed to the extent that operating income
for the twelve month period provided in the gas cost
adjustment filing exceeds the operating income authorized by
the IURC in the latest general rate case of the Company. 
During 1991-1993, this restriction did not affect the
Company.  Additionally, these procedures provide for
scheduled quarterly filings and IURC hearings to establish
the amount of price adjustments for a designated future
quarter.  The procedures also provide for inclusion in a
later quarter of any variances between estimated and actual
costs of gas sold in a given quarter.  This reconciliation
process with regard to changes in the cost of gas sold
closely matches revenues to expenses.  The Company's rate
structure does not include a weather normalization-type
clause whereby a utility would be authorized to recover the
gross margin on sales established in its last general rate
case, regardless of actual weather patterns.

     Natural gas research is supported by the Company
through the Gas Research Institute in cooperation with the
American Gas Association.  Since passage of the Natural Gas
Act of 1978, a major effort has gone into promoting gas 
 5
exploration by both conventional and unconventional sources. 
Efforts continue through various projects to extract gas
from tight gas sands, shale and coal.  Research is also
directed toward the areas of conservation, safety and the
environment.

     On December 23, 1993, the Company entered into a
definitive agreement to acquire Lincoln Natural Gas Company,
Inc., a small gas distribution company of approximately
1,300 customers contiguous to the eastern boundary of the
Company's gas service territory.  The acquisition is
expected to be completed by mid-1994, subject to necessary
regulatory and shareholder approvals.

NONUTILITY SUBSIDIARY

     During 1986, the Company formed a wholly-owned
subsidiary, Southern Indiana Properties, Inc., which owns
and/or operates certain nonutility assets.  Currently
included in the holdings of the subsidiary are an industrial
park, investments in several leveraged-lease financing
arrangements, investments in several tax oriented limited
partnerships, a portfolio of financial investments
(principally adjustable rate preferred stocks and municipal
bonds), and other nonutility property.  (See Note 3 of the
Notes To Consolidated Financial Statements, page 35, for
further discussion of Southern Indiana Properties, Inc.)

PERSONNEL

     The Company's network of gas and electric operations
directly involves 774 employees with an additional 190
employed at Alcoa's Warrick Power Plant.  Alcoa reimburses
the Company for the entire cost of the payroll and
associated benefits at the Warrick Plant, with the exception
of one-half of the payroll costs and benefits allocated to
Warrick Unit 4, which is jointly owned by the Company and
Alcoa.  The total payroll and benefits for Company employees
in 1993 (including all Warrick Plant employees) were $46.1
million, including $4.1 million of accrued postretirement
benefits other than pensions which the Company is deferring
as a regulatory asset until inclusion in rates.  (See Note 1
of the Notes To Consolidated Financial Statements, page 29,
for further discussion of the new financial accounting
standard requiring recognition of these costs effective
January 1, 1993 and related regulatory treatment.)  In 1992,
total payroll and benefits were $40.1 million.

     On July 3, 1991, the Company signed a new three-year
contract with Local 702 of the International Brotherhood of
Electric Workers.  The contract provided for a 4% general
wage increase each of the three years of the contract. 
Certain cost-containment measures related to health care
coverage were adopted.  Improvements in productivity, work
practices and the pension plan are also provided. 
Additionally, the Company's Hoosier Division signed a three-
year labor contract with Local 135 of the Teamsters,
Chauffeurs, Warehousemen and Helpers effective January 14,
1992.  The contract provided for a 4% general wage increase
each of the first and second years of the contract and a
3.75% general wage increase the third year of the contract. 
Also provided are improvements in health care coverage
costs, pension benefits, sick pay, work practices and
productivity.

CONSTRUCTION PROGRAM AND FINANCING

     A total of $80,109,000 was spent in 1993 on the
Company's construction program, of which $68,840,000 was for
the electric system, $5,772,000 for the gas system, $967,000
for common utility plant facilities, and $4,530,000 for the
Demand Side Management (DSM) Program.  (See "Demand Side
Management" in Item 7, MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, page 19.) 
Major construction project expenditures in 1993 included
$49.2 million of the originally projected $115 million
(including Allowance for Funds Used During Construction)
Culley Unit 2 and 3 scrubber project which is scheduled to
be completed by 1995.  (See "Clean Air Act" in Item 7,
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, page 18.)

     On May 11, 1993, the Company issued two series of
adjustable rate first mortgage bonds totaling $45.0 million
in connection with the sale of Warrick County, Indiana
environmental improvement revenue bonds.  The proceeds of
the revenue bonds have been placed in trust are being used
to finance a portion of the Culley scrubber project.  (See
"Liquidity and Capital Resources" in Item 7, MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, page 20 for further discussion of this
financing and discussion of the issuance of $110 million of
first mortgage bonds used to refinance existing long-term
debt.)  No other securities were issued by the Company
during 1993 for the purpose of funding its construction
program.


 6
     For 1994, construction expenditures are presently
estimated to be $92.2 million which includes $8.7 million
for DSM programs.  Expenditures in the power production area
are expected to total $55.8 million and include $41.7
million for the construction of the Culley scrubber project. 
The balance of the 1994 construction program consists of
$14.9 million for additions and improvements to other
electric system facilities, $8.1 million of additions and
improvements to the gas system and $4.7 million for the
final phase of the $27 million Norman P. Wagner operations
complex and miscellaneous common utility plant buildings,
fixtures and equipment.

     In keeping with the Company's objective to bring new
facilities on line as needed, the construction program and
amount of scheduled expenditures are reviewed periodically
to factor in load growth projections, system balance
requirements, environmental compliance and other
considerations.  As a result of this program of periodic
review, construction expenditures may change in the future
from the program as presented herein.
  
     For the five-year period of 1994-1998, it is estimated
that construction expenditures will total about $270 million
as follows:  1994 - $92 million; 1995 - $41 million; 1996 -
$44 million; 1997 - $48 million; and 1998 - $45 million. 
This construction program reflects approximately $51 million
for the Company's DSM programs and $44 million to meet the
Phase I requirements of the Clean Air Act Amendments of
1990.  While the Company expects the majority of the
construction requirements and an estimated $48 million in
debt security redemptions and other long-term obligations to
be provided by internally generated funds, external
financing requirements of $50-70 million are anticipated.

     The aforementioned amounts relating to the Company's
construction program are in all cases inclusive of Allowance
for Funds Used During Construction.

REGULATION

     Operating as a public utility under the laws of
Indiana, the Company is subject to regulation by the Indiana
Utility Regulatory Commission as to its rates, services,
accounts, depreciation, issuance of securities, acquisitions
and sale of utility properties or securities, and in other
respects as provided by the laws of Indiana.

     In addition, the Company is subject to regulation by
the Federal Energy Regulatory Commission with respect to the
classification of accounts, rates for its sales for resale,
interconnection agreements with other utilities, and
acquisitions and sale of certain utility properties as
provided by the laws of the United States.

     See "Electric Business" and "Gas Business" for further
discussion regarding regulatory matters.

     The Company is subject to regulations issued pursuant
to federal and state laws, pertaining to air and water
pollution control.  The economic impact of compliance with
these laws and regulations is substantial, as discussed in
detail under "Environmental Matters."  The Company is also
subject to multiple regulations issued by both federal and
state commissions under the Federal Public Utility
Regulatory Policies Act of 1978.

     As a result of the Company's ownership of 33% of
Community Natural Gas Company, the Company is a "Holding
Company" as such term is defined under the Public Utility
Holding Company Act of 1935 (the 1935 Act).  The Company is
exempt from all provisions of the 1935 Act except for the
provisions of Section 9(A)(2), which pertains to
acquisitions of other utilities.

COMPETITION

     The Company does not presently compete for electric or
gas customers with the other utilities within its assigned
service areas.  As a result of changes brought about by the
National Energy Policy Act of 1992, the Company may be
required to compete (or have the opportunity to compete)
with other utilities and wholesale generators for sales of
electricity to existing wholesale customers of the Company
and other potential wholesale customers.  (See subsequent
reference to discussion of this recent legislation.)  The
Company currently competes with other utilities in
connection with intersystem bulk power rates.

     Some of the Company's customers have, or in the future
could acquire, access to energy sources other than those
available through the Company.  (See "Gas Business", page 4,
for discussion of gas transportation.)  Although federal
statute allows for bypass of a local distribution (gas
utility) company, Indiana law disallows bypass in most cases

 7
and the Company would likely litigate such an attempt in the
Indiana courts.  Additionally, the Company's geographical
location in the corner of the state, surrounded on two sides
by rivers, limits customers' ability to bypass the Company
(by running long pipelines).  There is also increasing
interest in research on the development of sources of energy
other than those in general use.  Such competition from
other energy sources has not been a material factor to the
Company in the past.  The Company is unable, however, to
predict the extent of competition in the future or its
potential effect on the Company's operations.

     As part of its efforts to develop a National Energy
Strategy, Congress has amended the Public Utility Holding
Company Act and the Federal Power Act by enacting the
National Energy Policy Act of 1992 (the Act), which will
affect the traditional structure of the electric utility
industry.  (Refer to "National Energy Policy Act of 1992" in
Item 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, page 18 of this report,
for discussion of the major changes in the electric industry
effected by the Act.)

ENVIRONMENTAL MATTERS

     The Company is currently investigating the possible
existence of facilities once owned and operated by the
Company, its predecessors, previous landowners, or former
affiliates of the Company utilized for the manufacture of
gas.  Refer to "Environmental Matters" in Item 7,
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION, page 17 of this report,
for discussion of the Company's actions regarding the
investigation.

     The Company is subject to federal, state and local
regulations with respect to environmental matters,
principally air, solid waste and water quality.  Pursuant to
environmental regulations, the Company is required to obtain
operating permits for the electric generating plants which
it owns or operates and construction permits for any new
plants which it might propose to build.  Regulations
concerning air quality establish standards with respect to
both ambient air quality and emissions from the Company's
facilities, including particulate matter, sulfur dioxide and
nitrogen oxides.  Regulations concerning water quality
establish standards relating to intake and discharge of
water from the Company's facilities, including water used
for cooling purposes in electric generating facilities. 
Because of the scope and complexity of these regulations,
the Company is unable to predict the ultimate effect of such
regulations on its future operations, nor is it possible to
predict what other regulations may be adopted in the future. 
The Company intends to comply with all applicable valid
governmental regulations, but will contest any regulation it
deems to be unreasonable or impossible to comply with or
which is otherwise invalid.

     The implementation of federal and state regulations
designed to protect the environment, including those
hereinafter referred to, involves or may involve review,
certification or issuance of permits by federal and state
agencies.  Compliance with such regulations may limit or
prevent certain operations or substantially increase the
cost of operation of existing and future generating
installations, as well as seriously delay or increase the
cost of future construction.  Such compliance may also
require substantial investments above those amounts stated
under "Construction Program and Financing", page 5.

     All existing Company facilities have operating permits
from the Indiana Air Board.  In order to secure approval for
these permits, the Company has installed electrostatic
precipitators on all coal-fired units and is operating flue
gas desulfurization (FGD) units to remove sulfur dioxide
from the flue gas at its A. B. Brown Units 1 and 2
generating facilities.  The FGD units at the Brown Station
remove most of the sulfur dioxide from the flue gas
emissions by way of a scrubbing process, thereby allowing
the Company to burn high sulfur southern Indiana coal at the
station.

     Under the Federal Clean Air Act (the Act), states are
authorized to adopt implementation plans to fulfill the
requirements of the Act.  These state plans are subject to
approval by the U. S. Environmental Protection Agency (EPA). 
In 1972, Indiana adopted stringent regulations which
comprise the State Implementation Plan (SIP) for attaining
ambient air standards for particulates, sulfur dioxide and
nitrogen oxides.  The EPA approved that part of the SIP
which sets forth emission standards, fixes time schedules
for compliance with such standards and designates air
quality regions for the State.  The SIP was revised in 1979
to reflect revision of the Act and the State submitted the
revised plan to the EPA for approval.  On August 10, 1986,
the Sierra Club filed a lawsuit against the EPA under Civil
No. NA86-194-C seeking declaratory and injunctive relief to
compel the EPA to take action pursuant to the Act to reduce
sulfur dioxide emissions from power plants in Indiana
including the Company's Warrick Unit 4 and Culley Generating
Station.  In settlement of this suit, the EPA agreed that
there would be a SIP for the State by November 1988.  The
EPA gave final approval on December 16, 1988 to the Warrick
County sulfur dioxide emission limits which had been

 8
approved by the Indiana Air Pollution Control Board.  The
ruling provided for the reduction of sulfur dioxide
emissions from the two Warrick County generating stations,
Warrick and Culley, to take place in two phases.  The first
reduction, required by December 31, 1989, provided that
sulfur dioxide emissions from all units at both stations be
reduced to 5.41 lb/MMBTU from 6.00 lb/MMBTU.  Under the
second phase, which was effective August 1, 1991, sulfur
dioxide emissions from Culley Units 1 and 2 had to be
decreased to 2.79 lb/MMBTU, Culley Unit 3 was allowed to
remain at 5.41 lb/MMBTU, and emissions from all units at the
Warrick Generating Station had to be reduced to 5.11
lb/MMBTU.  The Company is currently in compliance with these
provisions.

     In October 1990, the U.S. Congress adopted major
revisions to the Act.  The revisions impose significant
restrictions on future emissions of sulfur dioxide (SO2) and
nitrogen oxide (NOX) from coal-burning electric generating
facilities, including those owned and operated by the
Company.  The legislation severely affects electric
utilities, especially those in the Midwest.  Two of the
Company's principal coal-fired facilities (A. B. Brown Units
1 and 2, totaling 500 megawatts of capacity) are presently
equipped with sulfur dioxide removal equipment (scrubbers)
and are not expected to be severely affected by the new
legislation.  However, 523 megawatts of the Company's coal-
fired generating capacity will be significantly impacted by
the lower emission requirements.  The Company will be
required to reduce total emissions from Culley Unit 3 (250
megawatts), Warrick Unit 4 (135 megawatts) and Culley Unit 2
(92 megawatts) by approximately 50% to 2.5 lb/MMBTU by
January 1995 (Phase I) and to 1.2 lb/MMBTU by January 2000
(Phase II).  In addition, Unit 1 at Culley Station (46
megawatts) is also subject to the 1.2 lb/MMBTU restriction
by January 2000.  The legislation includes various
incentives to promote the installation of scrubbers on units
affected by the 1995 deadline.  Current regulatory policy
allows for the recovery through rates of all authorized and
approved pollution control expenditures.

     (Refer to "Clean Air Act" in Item 7, MANAGEMENT'S
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION, page 18 of this report, for discussion
of the Company's Clean Air Act Compliance Plan, which was
filed with the IURC on January 3, 1992 and approved October
14, 1992, and the associated estimated costs.)

     In connection with the use of sulfur dioxide removal
equipment at the A. B. Brown Generating Station, the Company
operates a solid waste landfill for the disposal of
approximately 200,000 tons of residue per year from the
scrubbing process.  Renewal of the landfill operating permit
was granted in March 1992 by the Indiana Department of
Environmental Management (IDEM).  The permit expires in
January 1997.  Additionally, IDEM granted the Company's
request for modification (expansion) of the landfill,
issuing the construction permit in March 1992.

     Under the Federal Water Pollution Control Act of 1972
and Indiana law and regulations, the Company is required to
obtain permits to discharge effluents from its existing
generating stations into the navigable waterways of the
United States.  The State of Indiana has received
authorization from the EPA to administer the Federal
discharge permits program in Indiana.  Variances from
effluent limitations may be granted by permit on a plant-by-
plant basis where the utility can establish the limitations
are not necessary to assure the protection of aquatic life
and wildlife in and on the body of water into which the
discharge is to be made. The Company has been granted
National Pollution Discharge Elimination System (NPDES)
permits covering miscellaneous waste water and thermal
discharges for all its generating facilities to which the
NPDES is applicable, namely the Culley Station, A. B. Brown
Station and Warrick Unit 4.  Such discharge permits are
limited in time and must be renewed at five-year intervals. 
During 1989, the Company was granted renewed five-year
permits for effluent discharge for such generating
facilities, which are required to be renewed again in 1994. 
At present there are no known enforcement proceedings
concerning water quality pending or threatened against the
Company.

 9
EXECUTIVE OFFICERS OF THE COMPANY

     The executive officers of the Company are elected at
the annual organization meeting of the Board of Directors,
held immediately after the annual meeting of stockholders,
and serve until the next such organization meeting, unless
the Board of Directors shall otherwise determine, or unless
a resignation is submitted.


             Age at     Positions Held During
Name        12/31/93     Past Five Years               Dates
		                                            
R. G. Reherman  58    Chairman of the Board of Directors,
                      President and Chief Executive
                      Officer                           03-24-92 - Present 
                      President, Chief Executive Officer
                      and Director                      04-01-90 - 03-24-92
                      President, Chief Operating Officer
                      and Director                             * - 04-01-90

A.E.Goebel      46    Senior Vice President, Chief Financial
                      Officer, Secretary and Treasurer  02-21-89 - Present 
                      Vice President, Secretary and 
                      Treasurer                                * - 02-21-89

J.G.Hurst       50    Senior Vice President and General Manager
                      of Operations                     03-01-92 - Present 
                      Vice President, Gas and Warrick
                      Operations                        01-01-89 - 03-01-92

G.M.McManus     46    Vice President and Director of Governmental
                      and Public Relations              03-01-92 - Present 
                      Director of Governmental Affairs  12-01-89 - 03-01-92

J.W.Picking     62    Vice President and Director of Gas
                      Operations                        03-01-92 - Present 
                      Director of Gas Operations        01-01-89 - 03-01-92

* Indicates positions held at least since 1989.


Item 2.  PROPERTIES

     The Company's installed generating capacity as of
December 31, 1993 was rated at 1,238,000 Kw.  The Company's
coal-fired generating facilities are:  the Brown Station
with 500,000 Kw of capacity, located in Posey County about
eight miles east of Mt. Vernon, Indiana; the Culley Station
with 388,000 Kw of capacity, and  Warrick Unit 4 with
135,000 Kw of capacity.  Both the Culley and Warrick
Stations are located in Warrick County near Yankeetown,
Indiana.  The Company's gas-fired turbine peaking units are: 
the 80,000 Kw Brown Gas Turbine located at the Brown
Station; two Broadway Gas Turbines located in Evansville,
Vanderburgh County, Indiana, with a combined capacity of
115,000 Kw; and, two Northeast Gas Turbines located
northeast of Evansville in Vanderburgh County, Indiana with
a combined capacity of 20,000 Kw.  The Brown and Broadway
turbines are also equipped to burn oil.  Total capacity of
the Company's five gas turbines is 215,000 Kw and are
generally used only for reserve, peaking or emergency
purposes due to the higher per unit cost of generation.  
     The Company's transmission system consists of 871
circuit miles of 138,000, 69,000 and 36,000 volt lines.  The
transmission system also includes 26 substations with an
installed capacity of 3,874,724 kilovolt amperes (Kva).  The
electric distribution system includes 3,177 pole miles of
lower voltage overhead lines and 180 trench miles of conduit
containing 987 miles of underground distribution cable.  The
distribution system also includes 86 distribution
substations with an installed capacity of 1,306,508 Kva and
45,057 distribution transformers with an installed capacity
of 1,771,152 Kva.

     The Company owns and operates three underground gas
storage fields with an estimated ready delivery from storage
capability of 3.9 million Dth of gas.  The Oliver Field, in
service since 1954, is located in Posey County, Indiana,
about 13 miles west of Evansville.  The Midway Field is
located in Spencer County, Indiana, about 20 miles east

 10
of Evansville near Richland, Indiana, and was placed in
service in December 1966.  The third field is the Monroe
City Field, located in Knox County, about 10 miles east of
Vincennes, Indiana.  The field was placed in service in
1958.

     The Company's gas transmission system includes 324
miles of transmission mains, and the gas distribution system
includes 2,196 miles of distribution mains.

     The Company's properties, but not those of its
subsidiary, are subject to the lien of the First Mortgage
Indenture dated as of April 1, 1932 between the Company and
Bankers Trust Company, New York, as Trustee, as supplemented
by various supplemental indentures, all of which are
exhibits to this report and collectively referred to as the
"Mortgage".

Item 3.  LEGAL PROCEEDINGS.

     On January 27, 1993, a coal supplier filed a complaint
in the Federal District Court for the Southern District of
Indiana alleging that the Company breached a coal supply
contract between the Company and that supplier.  The Company
had notified the supplier that it would not require any
delivery of coal under the contract for at least some part
of 1993.  The supplier claims that this action violates
certain minimum purchase requirements imposed by the
contract, and asked the court to require specific
performance of the contract by the Company and for
unspecified monetary damages.  The complaint alleges that
the Company is obligated to purchase coal at a minimum rate
of 50,000 tons per month under the contract and at any event
to purchase all of the coal consumed at the Company's A. B.
Brown generating plant below 1,000,000 tons per year.  The
contested contract may run until December 31, 1998.  The
Company filed counterclaims and disputes that its actions
have violated the terms of the contract.  On March 26, 1993,
the Company and the coal supplier agreed to resume coal
shipments but with the invoiced price per ton substantially
lower than the contract price and subject to final outcome
of the litigation.  (Refer to "Rate and Regulatory Matters"
in Item 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION, page 15 of this
report, for discussion of the pricing of this coal to
inventory and the associated ratemaking treatment.)  On June
6, 1993, the coal supplier won a summary judgement to
require the Company to take a minimum of 600,000 tons
annually, more or less in equal weekly shipments.  The
decision cannot be appealed until resolution of other
contract provisions still before the court.

     There are no other pending legal proceedings, other
than ordinary routine litigation incidental to the business,
to which the registrant is a party.

     No material legal proceedings were terminated during
the fourth quarter of 1993.

Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

     None

                             PART II

Item 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
          RELATED SECURITY HOLDER MATTERS

     The principal market on which the registrant's common
stock (Common Stock) is traded is the New York Stock
Exchange, Inc. where the Common Stock is listed.  The high
and low sales prices for the stock as reported in the
consolidated transaction reporting system for each quarterly
period during the two most recent fiscal years are:


                           QUARTERLY PERIOD             
                1                2               3                4 
         High    Low      High    Low     High     Low     High    Low
                                           
1993     $34-3/4 $32-3/4  $34-7/8 $32-3/8 $34-3/8  $33     $35-1/2 $31-7/8
1992 $33.84  $30.47   $32-1/8 $30-3/8 $32-3/4  $31-1/8 $34-1/8 $31-3/4

     As of February 4, 1994 there were 9,445 holders of
record of Common Stock.

 11
     Dividends declared and paid per share of Common Stock
during the past two years were:


                                  QUARTERLY PERIOD  
                1                 2              3             4
                                                
1993         $0.4025           $0.4025        $0.4025       $0.4025
1992     $0.39             $0.39          $0.39         $0.39

 Stock prices and dividends per share for the first
quarter of 1992 have been restated to reflect the four-for-
three stock split effective March 30, 1992.

    The quarterly dividend on Common Stock was increased to
41-1/4 cents per share in January 1994, payable March 21, 1994.

    The payment of cash dividends on Common Stock is, in
effect, restricted by the Mortgage to accumulated surplus,
available for distribution to the Common Stock, earned
subsequent to December 31, 1947, subject to reduction if
amounts deducted from earnings for current repairs and
maintenance and provisions for renewals, replacements and
depreciation of all the property of the Company are less
than amounts specified in the Mortgage.  See Section 1.02 of
the Supplemental Indenture dated as of July 1, 1948, as
supplemented.  No amount was restricted against cash
dividends on Common Stock as of December 31, 1993, under
this restriction.

    The payment of cash dividends on Common Stock is, in
effect, restricted by the Amended Articles of Incorporation
to accumulated surplus, available for distribution to the
Common Stock, earned subsequent to December 31, 1935.  The
Amended Articles of Incorporation require that, immediately
after such dividends, there shall remain to the credit of
earned surplus an amount at least equal to two times the
annual dividend requirements on all then outstanding
Preferred Stock, No Par Value.  See Art. VI, Terms of
Capital Stock, General Provisions (B).  The amount
restricted against cash dividends on Common Stock at
December 31, 1993 under this restriction was $2,209,642,
leaving $201,848,514 unrestricted for the payment of
dividends.  In addition, the Amended Articles of
Incorporation provide that surplus otherwise available for
the payment of dividends on Common Stock shall be restricted
to the extent that such surplus is included in a calculation
required to permit the Company to issue, sell or dispose of
preferred stock or other stock senior to the Common Stock
(Art. VI, Terms of Capital Stock, General Provisions (E)).

     An order of the Securities and Exchange Commission
dated October 12, 1944 under the Public Utility Holding
Company Act of 1935 in effect restricts the payment of cash
dividends on Common Stock to 75% of net income available for
distribution to the Common Stock, earned subsequent to
December 31, 1943, if the percentage of Common Stock equity
to total capitalization and surplus, as defined, is less
than 25%.  At December 31, 1993, such ratio amounted to
approximately 47%.

Item 6.  SELECTED FINANCIAL DATA




                               For The Years Ended December 31,
                           1993      1992       1991      1990      1989
(in thousands except per share data)
                                                  
Operating Revenues      $328,521  $305,947   $322,582  $322,520  $311,542
Operating Income        $ 51,642  $ 50,919   $ 53,156  $ 51,934  $ 51,600
Net Income              $ 39,653  $ 36,767   $ 38,513  $ 37,691  $ 36,216
Net Income Applicable
 to Common Stock        $ 38,548  $ 35,500   $ 37,232  $ 36,409  $ 34,931
Average Common Shares
 Outstanding              15,705    15,705     15,705    16,096    16,588
Earnings Per Share
 of Common Stock        $   2.45  $   2.26   $   2.37  $   2.26  $   2.11
Dividends Per Share
 of Common Stock        $   1.61  $   1.56   $   1.50  $   1.43  $   1.35
Total Assets            $860,023  $761,281   $747,445  $738,803  $721,059
Redeemable Preferred
 Stock                  $  8,515  $  8,515   $  1,100  $  1,110  $  1,110
Long-Term Obligations   $274,884  $213,026   $236,844  $257,022  $219,682



 12
Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
AND FINANCIAL CONDITION

Earnings per share of $2.45 in 1993 were the highest in
Company history, following 1992 earnings of $2.26.  The
record 1993 earnings exceeded the previous all-time high of
$2.37 in 1991 by 3%.

The 1993 earnings were favorably impacted by higher
operating revenues due to weather-related increases in
retail gas and electric sales.  Greater maintenance and
nonfuel-related operating expenses and fewer sales to
wholesale electric customers partially offset the impact of
the higher retail sales.  Increased allowance for funds used
during construction resulting from the Company's expanded
construction program also contributed to the higher
earnings.

For the thirty-fifth consecutive year, the Board of
Directors declared a dividend increase to common
shareholders at its January 1994 meeting.  Payable in March
1994, the Company's new quarterly dividend is 41-1/4cents
per share, increasing the indicated annual rate to $1.65 per
share.

ELECTRIC OPERATIONS.

The table below compares changes in operating revenues,
operating expenses, and electric sales between 1993 and 1992,
and between 1992 and 1991, in summary form.



                                                   Increase
CHANGES IN ELECTRIC OPERATING INCOME              (Decrease) 
                                              1993         1992
                                                 in thousands)
                                                   
Operating Revenues - System                  $17,586     $(12,909)
                   - Nonsystem                (2,258)      (7,901)
                                              15,328      (20,810)
Operating Expenses:
  Fuel for electric generation                  (159)      (8,815)
  Purchased electric energy                    6,434       (2,739)
  Other operation                              2,274       (1,180)
  Maintenance                                  3,967       (4,538)
  Depreciation and amortization                  695         (793)
  Federal and state income taxes               1,921       (1,824)
  Property and other taxes                      (707)       1,236 
                                             _______     ________
                                              14,425      (18,653)
  Changes in electric operating income       $   903     $ (2,157)

CHANGES IN ELECTRIC SALES - MWh:              
  System                                     319,114     (133,795)
  Nonsystem                                  (82,600)     369,189)
                                             ________    _________
                                             236,514     (502,984)


Higher weather-related sales to the Company's retail
customers was the primary reason for the 6.3% ($15.3
million) rise in electric operating revenues.  Effective
October 1, 1993, the Company implemented the first step
(about 1% overall) of a three-step increase in its base
electric rates to recover the cost of complying with the
Clean Air Act Amendments of 1990 (see "Rate and Regulatory
Matters"), however, the rate increase had little impact on
electric revenues during 1993.  In 1992, operating revenues
declined 7.9% ($20.8 million) due to fewer sales to retail
and wholesale customers.

Cooler winter weather and much warmer summer temperatures,
when cooling degree days were 30% greater than the prior
year and about 17% above normal, were responsible for the
12.1% and 6.3% increases in residential and commercial
sales, respectively.  Following flat sales in 1992,
industrial sales rose 5.7% during the current year due to
increased manufacturing activity.  Total system sales were
up 7.6% over 1992.  The Company experienced a 3.1% overall
decline in system sales in 1992 when cooling degree days
were down 30%.
  
During 1993, the Company's electric customer base grew by
1,276, or 1%, totaling 118,163 at year end.

 13
In addition to greater system sales, 1993 system revenues
increased approximately $2.7 million due to the recovery of
higher unit fuel costs (see subsequent discussion of changes
in the cost of fuel for electric generation), following a
$4.7 million reduction in electric revenues in 1992 due to
lower unit costs.  Changes in the cost of fuel for electric
generation and purchased power are reflected in customer
rates through commission approved fuel cost adjustments.

Because of the current worldwide oversupply of primary
aluminum and softening demand for rolled can sheet aluminum
in the United States, the Aluminum Company of America
(Alcoa) shut down several older potlines at various
manufacturing facilities.  Alcoa Generating Corporation
(AGC), a wholly-owned subsidiary of Alcoa, provides the
energy requirements for five potlines at Alcoa's Warrick
County, Indiana facility from its Warrick Generating
Station.  Since 1987, the Company has provided electric
energy to AGC (a wholesale customer) for a sixth potline. 
On July 20,1993, Alcoa shut down the oldest of the six
potlines at the Warrick County manufacturing operation.  The
Company estimates that the decline in electric sales related
to the potline for 1993 represented approximately $4.8
million in nonsystem revenues and approximately $.8 million
in operating income compared to the prior year.  Greater
sales to other nonsystem customers, due in part to the
region's warmer summer temperatures, partially offset the
decline in sales to AGC.  Total nonsystem sales by the
Company declined 8.3% during the year.  On an annual basis,
the decline in revenue related to the reduced sales to AGC
is estimated at $14.4 million with a corresponding $2.4
million decline in operating income.  The Company
anticipates that a portion of the decline in operating
income will be offset in the future by increases in sales to
other nonsystem customers made possible by the reduced
commitment to AGC.  Most sales to nonsystem customers,
including AGC, are on an "as available" basis under
interchange agreements which provide for significantly lower
margins than sales to system customers.

Due to the much warmer summer temperatures, and to the
increased demand by industrial customers, a new all-time
peak load obligation of 1,100 megawatts was reached on July
28, 1993.  The previous record peak, 1,054 megawatts, was
set in 1988.  The 1992 peak of 992 megawatts was held down
by the unseasonably cool summer weather.  The Company's
total generating capacity at the time of the 1993 peak was
1,238 megawatts, representing an 11% capacity margin.

Fuel for electric generation, the most significant electric
operating cost, was comparable to 1992.  Slightly (2.8%)
higher costs of coal per MMBtu consumed due to less
favorable volume-related pricing, higher average per unit
mine production costs,  and the amortized cost of the buyout
of one of the Company's long-term coal contracts (see "Rate
and Regulatory Matters"), were offset by a decline in
generation.  The Company continues to pursue further
reductions in coal prices as a key component of its strategy
to remain a low-cost provider of electricity.  The decline
in 1992 fuel cost reflected a 6.2% decrease in generation
and a lower average cost of coal consumed.

The greater energy requirements of the Company's customers
and favorably priced power were the primary reasons for the
increased purchases of electricity from other utilities, up
substantially (220%) during 1993.  Purchased electric energy
costs decreased 48% in 1992 due to fewer purchases and lower
average rates paid for such power.

After a 4.1% decrease in 1992, other operation expenditures
rose 8.2% ($2.3 million) during the current year chiefly due
to increased provisions for injuries and damages, consulting
and legal expenditures related to a coal contract buyout
(see "Rate and Regulatory Matters") and ongoing coal
contract negotiations and litigation, and increases in
various administrative and general costs.

Greater production plant maintenance activity was the
primary reason for the 20% ($4 million) increase in electric
maintenance expense.  The Company performed a scheduled
major turbine generator overhaul on A.B. Brown Unit 2 during
the year and completed a major overhaul on the Culley Unit 1
turbine generator begun in late 1992.  The Culley Unit 1
turbine generator overhaul was the only major maintenance
project during 1992, when electric maintenance expenditures
were down $4.5 million.

Depreciation and amortization expense increased slightly in
1993 reflecting normal additions to utility plant and the
completion of the warehouse and operations building at the
Company's new Norman P. Wagner Operations Center.  A decline
in depreciation and amortization occurred in 1992 when
amortization provisions related to the deferred return on
the phasein of A. B. Brown Unit 2 expired.

While inflation has a significant impact on the replacement
cost of the Company's facilities, under the rate-making
principles followed by the Indiana Utility Regulatory
Commission (IURC), under whose regulatory jurisdiction the
Company is subject, only the historical cost of electric and
gas plant investment is recoverable in revenues as 
 14
depreciation.  With the exception of adjustments for changes
in fuel and gas costs and margin on sales lost under the
Company's demand side management programs (see "Demand Side
Management"), the Company's electric and gas rates remain
unchanged until a rate application is filed and a general
rate order is issued by the IURC.

In addition to the impact of higher 1993 pretax income on
income tax expense, the Company provided approximately $.5
million of additional federal income tax expense to reflect
the higher tax rates enacted under the Omnibus Budget
Reconciliation Act of 1993.  (See Note1 of the Notes to
Consolidated Financial Statements for further discussion.) 
Decreased income tax expense in 1992 was chiefly
attributable to lower pretax income.  The decrease in taxes
other than income taxes during the current year resulted
from a 1992 increase in property tax expense reflecting the
general reassessment of the Company's property.

GAS OPERATIONS.

The following table compares changes in operating revenues, 
operating expenses, and gas sold and transported between 1993
and 1992, and between 1992 and 1991, in summary form.


                                         Increase
CHANGES IN GAS OPERATING INCOME                  (Decrease)         
                                              1993        1992
                                               (in thousands)
                                                   
 Operating Revenues - Sales                  $7,068      $4,621 
                    - Transportation            178        (446)
                                                          7,246
                                              4,175 
Operating Expenses:
  Cost of gas sold                            4,482       5,369 
  Other operation                             2,314        (146)
  Maintenance                                   741        (632)
  Depreciation                                   31         211 
  Federal and state income taxes                (86)     (1,083)
  Property and other taxes                      (56)        536 
                                              7,426       4,255 
  Changes in gas operating income            $ (180)     $  (80)

CHANGES IN GAS SOLD AND TRANSPORTED - MDth:
  Sold                                          889         818 
  Transported                                 1,874          26 
                                             ______      ______
                                              2,763         844 


Greater sales of natural gas and higher gas costs recovered
through retail rates led to an 11.5% ($7.2 million) increase
in gas operating revenues.  Effective August 1, the Company
implemented the first step (about 4% overall) of a two-step
increase in its base gas rates (see "Rate and Regulatory
Matters"), however, the impact on gas revenues during 1993
was not significant.

A 5.6% rise in the Company's gas sales in 1993 reflected
increased sales to residential and commercial customers, up
12.8% and 10.2%, respectively.  Although heating degree days
during the period were about normal, they were 10% greater
than those recorded in 1992.  Deliveries to industrial
customers under the Company's sales and transportation
tariffs were up 7.6%, reflecting the increased manufacturing
activity of several of the Company's largest industrial
customers.  In 1992, residential sales were flat and
commercial sales were up only 3.1% due to milder winter
weather; industrial sales and transportation volumes
increased 6.7% during the same period.
  
During 1993, 1,402 new gas customers were added to the
Company's system, raising the year end total 1.4% to
100,398.

On December 23, 1993, the Company entered into a definitive
agreement to acquire Lincoln Natural Gas, a small gas
distribution company of approximately 1,300 customers
contiguous to the eastern boundary of the Company's gas

 15
service territory.  The acquisition is expected to be
completed by mid-1994, subject to necessary regulatory and
shareholder approvals.

The recovery of higher unit gas costs, up 6.1%, through
retail rates in 1993 raised revenues $2.7 million following
a $1.3 million increase in revenues related to the recovery
of higher unit costs in the prior year.  During the past two
years, the market for purchase of natural gas supply has
been very volatile with the average price ranging from a low
of $1.34 per Dth in February 1992 to the peak of $2.58 per
Dth in May 1993.  Prices have declined somewhat since May
but remain above the February low reflecting a general
tightening of the balance between available supply and
demand after several years of excess supply.  Changes in the
cost of gas sold are passed on to customers through IURC
approved gas cost adjustments.

Cost of gas sold, the major component of gas operating
expenses, was up 9.7% ($4.5 million) in 1993, following a
13.2% ($5.4 million) increase in 1992.  The higher costs in
both 1993 and 1992 reflected the increased deliveries to
customers and higher unit costs.

Although the Company's primary pipeline supplier, Texas Gas
Transmission Corporation (TGTC), implemented revised tariffs
November 1, 1993 to reflect certain changes required by
Federal Energy Regulatory Commission (FERC) Order 636, the
Company's 1993 purchased gas costs were relatively
unaffected by the new tariffs.  As of November 1,1993, TGTC
ceased to be a supplier of natural gas to the Company, and
the Company assumed full responsibility for the purchase of
all its natural gas supplies.  (See "Rate and Regulatory
Matters" for further discussion of FERC Order No. 636 and of
the impact on future purchased gas costs and procurement
practices of the Company.)

Other operation and maintenance expenses were 31% ($3.1
million) greater than the prior year due to increased
provisions for injuries and damages (see "Environmental
Matters" for discussion of the Company's investigation of
the possible existence of facilities utilized for the
manufacture of gas), abnormally low distribution maintenance
expenses in 1992, and increases in various administrative
and general costs.

Depreciation expense for 1993 and 1992 reflected increased
gas plant additions during the past several years due to new
business requirements and various improvements made to the
distribution system.  Partially offsetting the impact of
increased gas plant additions were lower depreciation rates
implemented during 1993 as a result of the Company's recent
gas rate case.

Income tax expense for  the current year was comparable to
1992, following a substantial decrease in income tax expense
in 1992 resulting from lower pretax operating income.

OTHER INCOME AND INTEREST CHARGES.  

Other income was $2.5million greater during 1993 due to 
increased allowance for equity funds used during construction, 
resulting primarily from the construction of the Company's
new sulfur dioxide scrubber.  (See "Clean Air Act" for further
discussion.)  Following a significant increase in nonutility
income in 1991, nonutility income declined in 1992.  The
decline was largely due to lower fees from AGC for operation
of its Warrick Generating Station.

Interest expense during the current year was relatively
unchanged.  The impact of an additional $45 million of long-
term debt issued during the second quarter was offset by
savings from refinancing $105 million of long-term debt in
the second quarter, which reduced annual interest expense by
$1 million, and by additional interest capitalized due to
the increased construction program.

RATE AND REGULATORY MATTERS.

In November 1992, the Company petitioned the IURC requesting
a general increase in gas rates, the first such adjustment 
since 1982.  On July 21,1993, the IURC approved an overall 
increase of approximately 8%, or $5.5 million in revenues,
in the Company's base gas rates.  The increase is to be 
implemented in two equal steps.  The first step of the rate 
adjustment, approximately 4%, took place August 1, 1993; the 
second step will become effective August 1, 1994.

 16
In addition to seeking relief for rising operating and
maintenance costs and substantial investment in utility
plant over the past decade, the Company sought to
restructure its tariffs, make available additional services,
and "unbundle" existing services to better serve its gas
customers and strategically position itself to address the
changes brought about by the continued deregulation of the
natural gas industry.  (See subsequent discussion of FERC
Order No. 636 in this section.)

On May 24, 1993, the Company petitioned the IURC for an
adjustment in its base electric rates representing the first
step in the recovery of the financing costs on its
investment through March 31, 1993 in the Clean Air Act
Compliance project presently being constructed at the Culley
Generating Station.  The majority of the costs are for the
installation of a sulfur dioxide scrubber on Culley Units 2
and 3.  (See "Clean Air Act" for further discussion of the
project and previous approval of ratemaking treatment of the
incurred costs.)  On September 15,1993, the IURC granted the
Company's request for a 1% revenue increase, approximately
$1.8 million on an annual basis, which took effect October
1, 1993.  The Company anticipates petitioning the IURC in
February 1994 for a 2-3% increase for financing costs
related to the project construction expenditures incurred
since April 1,1993, with implementation of the new rates
effective mid-1994.

On December 22, 1993, the Company filed a request with the
IURC for the third of the three planned general electric
rate increases.  This final adjustment, expected to occur in
early 1995, is estimated to be 6-9% and is necessary to
recover financing costs related to the balance of the
project construction expenditures, costs related to the
operation of the scrubber, and certain nonscrubber-related
costs such as additional costs incurred for postretirement
benefits other than pensions beginning in 1993 and the
recovery of demand side management program expenditures (see
"Demand Side Management").

Over the past several years, the Company has been actively
involved in intensive contract negotiations and legal
actions to reduce its coal costs and thereby lower its
electric rates.  During 1992, the Company was successful in
negotiating a new coal supply contract with one of its major
coal suppliers.  The new agreement, effective through 1995,
was retroactive to 1991.  Included in the agreement was a
provision whereby the contract could be reopened by the
Company for modification of certain coal specifications.  In
early 1993, the Company reopened the contract for such
modifications.  In response, the coal supplier elected to
terminate the contract enabling the Company to buy out the
remainder of its contractual obligations and acquire lower
priced spot market coal.  The cost of the contract buyout in
1993, which was based on estimated tons of coal to be
consumed during the agreement period, and related legal and
consulting services, totaled approximately $18 million.  The
Company anticipates that $2 million in additional buyout
costs for actual tons of coal consumed above the previously
estimated amount may be incurred during the 1994-1995
period.  On September 22, 1993, the IURC approved the
Company's request to amortize all buyout costs to coal
inventory during the period July 1,1993 through December 31,
1995 and to recover such costs through the fuel adjustment
clause beginning February 1994.

The Company estimates the savings in coal costs during the
1991-1995 period, net of the total buyout costs, will
approximate $56 million.  The net savings are being passed
back to the Company's electric customers through the fuel
adjustment clause.

The Company is currently in litigation with another coal
supplier in an attempt to restructure an existing contract. 
Under the terms of the original contract, the Company was
allegedly obligated to take 600,000 tons of coal annually. 
In early 1993, the Company informed the supplier that it
would not require shipments under the contract until later
in 1993.  On March 26, 1993, the Company and the supplier
agreed to resume coal shipments under the terms of their
original contract except the invoiced price per ton would be
substantially lower than the contract price.  As approved by
the IURC, the Company has charged the full contract price to
coal inventory for subsequent recovery through the fuel
adjustment clause.  The difference between the contract
price and the invoice price has been deposited in an escrow
account with an offsetting accrued liability which will be
paid either to the Company's ratepayers or its coal supplier
upon settlement of the litigation.  The escrowed amount was
$8,749,000 at December 31, 1993.  This litigation is
scheduled for trial in June of 1994.  Since the litigation
arose due to the Company's efforts to reduce fuel costs,
management believes that any related costs should be
recoverable through the regulatory ratemaking process.

In late 1993, in a further effort to reduce coal costs, the
Company and the supplier entered into a letter agreement,
effective January 1, 1994, and until the litigation is
settled, whereby the Company will purchase an additional
50,000 tons monthly above the alleged base requirements at a
price lower than the original contract price for tons over
50,000 per month.

In April 1992, the Federal Energy Regulatory Commission
(FERC) issued Order No. 636 (the Order) which required
interstate pipelines to restructure their services.  In
August 1992, the FERC issued Order No. 636-A which 
 17
substantially reaffirmed the content of the original Order. 
Under the Order, the stated purpose of which is to improve
the competitive structure of the natural gas pipeline
industry, existing pipeline sales service was "unbundled" so
that gas supplies are sold separately from interstate
transportation services.  This restructuring has occurred
through tariff filings by pipelines after negotiations with
their customers.  Customers, such as the Company and
ultimately its gas customers, could benefit from enhanced
access to competitively priced gas supplies as well as from
more flexible transportation services.  Conversely, customer
costs will rise because the Order requires pipelines to
implement new rate design methods which shift additional
demand-related costs to firm customers; additionally, the
FERC has authorized the pipelines to seek recovery of
certain "transition" costs associated with restructuring
from their customers.  

On November 2, 1992, the Company's major pipeline supplier,
Texas Gas Transmission Corporation (TGTC), filed a recovery
implementation plan with the FERC as part of its revised
compliance filing regarding the Order.  On October 1, 1993,
the FERC accepted, subject to certain conditions, the TGTC
recovery implementation plan (the Plan).  The Plan, which
addresses numerous issues related to the implementation of
the requirements of the  Order, became effective November 1,
1993.  Under new TGTC transportation tariffs, which reflect
the Plan's provisions, the Company will incur additional
annual demand-related charges of approximately $1.9 million. 
Savings from lower volume-related transportation costs will
partially offset the additional charges.  TGTC has not yet
determined the Company's allocation of transition costs,
however, an estimate of such costs and implementation of
revised TGTC tariffs to recover such costs are expected
during the first quarter of 1994.  Due to the anticipated
regulatory treatment at the state level, the Company does
not expect the Order to have a detrimental effect on its
financial condition or results of operations.

ENVIRONMENTAL MATTERS.  

The Company is currently investigating the possible 
existence of facilities once owned and operated by the 
Company, its predecessors, previous landowners, or former 
affiliates of the Company utilized for the manufacture of 
gas.

These facilities, if they existed, would have been operated
from the 1850's through the early 1950's under industry
standards then in effect.  Operations at these facilities
would have ceased many years ago.  However, due to current
environmental regulations, the Company and other responsible
parties may be required to take remedial action if certain
materials are found at the sites of these former facilities.

The Company has just recently initiated its investigation,
and preliminary assessments have not yet been performed on
any sites.  However, based on its research, the Company has
identified the existence and general location of four sites
at which contamination may be present.  The Company intends
to perform preliminary assessments of all four sites during
1994 and, more than likely, will perform comprehensive
investigations of some, or all, of these sites to determine
if remedial action is required and to estimate the extent of
such action and the associated costs.

The Company has notified all known insurance carriers
providing coverage during the probable period of operation
of these facilities of potential claims for coverage of
environmental costs.  The Company has not, however, recorded
any receivables representing future recovery from insurance
carriers.  Additionally, the Company is attempting to
identify all potentially responsible parties for each site. 
The Company has not been named a potentially responsible
party by the Environmental Protection Agency for any of
these sites.

While the Company intends to seek recovery from other
responsible parties or insurance carriers, the Company does
not presently anticipate seeking recovery of these
investigation costs from its ratepayers.  Therefore, the
Company has expensed the $.5 million of anticipated cost of
performing preliminary site assessments and the more
comprehensive specific site investigations of all four
sites.  If, however, the specific site investigations
indicate that significant remedial action is required, the
Company will seek recovery of all related costs in excess of
amounts recovered from other potentially responsible parties
or insurance carriers through rates.

Although the IURC has not yet ruled on a pending request for
rate recovery by another Indiana utility of such
environmental costs, the IURC did grant that utility
authority to utilize deferred accounting for such costs
until the IURC rules on the request.

 18
NATIONAL ENERGY POLICY ACT OF 1992.

In late 1992, the National Energy Policy Act of 1992 (the
Act) was signed into law, enacting the first comprehensive
energy legislation since the National Energy Act of 1978.

Key provisions contained in the Act, specifically Title VII
(Electricity), are expected to cause some of the most
significant changes in the history of the electric industry. 
The primary purpose of Title VII is to increase competition
in electric generation by enabling virtually nonregulated
entities, such as exempt wholesale generators, to develop
power plants, and by providing the FERC authority to require
a utility to provide transmission services, including the
expansion of the utility's transmission facilities necessary
to provide such services, to any entity generating
electricity.  Although the FERC may not order retail
wheeling, the transmission of electricity directly to an
ultimate consumer, it may order wheeling of electricity
generated by an exempt wholesale generator or another
utility to a wholesale customer of a regulated utility.

The changes brought about by the Act may require, or provide
opportunities for, the Company to compete with other
utilities and wholesale generators for sales to existing
wholesale customers of the Company and other potential
wholesale customers.  The Company has long-term contracts
with its five wholesale customers which mitigate the
opportunity for other generators to provide service to them. 
Many observers of the electric utility industry, including
major credit rating agencies, certain financial analysts,
and some industry executives, have expressed an opinion that
retail wheeling to large retail customers and other elements
of a more competitive business environment will occur in the
electric utility industry, similar to developments in the
telecommunications and natural gas industries.  The timing
of these projected developments is uncertain.  In addition,
the FERC has adopted a position, generically and on a case-
by-case basis, that it will pursue a more competitive, less
regulated, electric utility industry.  Although the Company
is uncertain of the final outcome of these developments, it
is committed to pursuing, and is moving rapidly to
implement, its corporate strategy of positioning itself as a
low-cost energy producer and the provider of high quality
service to its retail as well as wholesale customers.

The Company already has some of the lowest per unit
administrative, operation, and maintenance costs in the
nation, and is continuing its efforts to further reduce its
coal costs (see previous discussion of coal contract
renegotiation in "Rates and Regulatory Matters").

CLEAN AIR ACT.

  Revisions to federal clean air laws were enacted in 1990
which have a significant impact on all of American industry. 
Electric utilities, especially in the Midwest, were severely
impacted by Title IV (acid rain provisions) of the Clean Air
Act Amendments of 1990.

Title IV mandates utilities to significantly reduce
emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx)
from coal-burning electric generating facilities in two
steps.  The Company is required to reduce annual emissions
of SO2 on a Company-wide basis by approximately 50% by 1995
(Phase I).  By the year 2000 (PhaseII), the Company must
reduce emissions of SO2 by approximately 50% from the
allowed 1995 level.  Since the Company's two newest coal-
fired generating units, A.B. Brown Units 1 and2 (500 MW
total), are equipped with SO2 removal equipment (scrubbers),
the impact of the law, although significant, is not as great
for the Company as for some other midwestern utilities.

To meet the Phase I requirements and nearly all of the Phase
II requirements, the Company's Clean Air Act Compliance Plan
(the Compliance Plan), which was developed as a least-cost
approach to compliance, proposed the installation of a
single scrubber at the Culley Generating Station to serve
both Culley Unit 2 (92MW) and Culley Unit 3 (250 MW) and the
installation of state of the art low NOx burners on these
two units.

In January 1992, the Company filed a petition with the IURC,
requesting preapproval of the Compliance Plan and proposing
recovery of financing costs to be incurred during the
construction period.  In October 1992, the IURC approved a
stipulation and settlement agreement between the Company and
intervenors pertaining to the petition, which essentially
granted the request.

Construction of the facilities, originally projected to cost
approximately $115 million including the related allowance
for funds used during construction, began during 1992 with
completion and testing expected to occur in late 1994. 
Construction costs are currently running under budget. 
Commercial operation will begin about January 1, 1995 to

 19
comply with requirements of the Clean Air Act Amendments of
1990.  Under the settlement agreement, the maximum capital
cost of the compliance plan to be recovered from ratepayers
is capped at approximately $107 million, plus any related
allowance for funds used during construction.  The estimated
cost to operate and maintain the facilities, including the
cost of chemicals to be used in the process, is $4-6 million
per year, beginning in 1995.

By installing a scrubber, the Company was entitled to apply
for extra allowances, called "extension allowances", to the
federal EPA.  However, because utilities applied for more
extension allowances than the Act made available, the
federal EPA established a lottery procedure to determine
which utilities would actually receive the extension
allowances.  In order to ensure receipt of a majority of the
extension allowances, the Company, and nearly all of the
other applying utilities, formed an allowance pooling group. 
As a result, the Company will receive about 88,000 extension
allowances, which it has sold to another party under a
confidential agreement.  The Company will credit the
proceeds to customers over 1995-1999, reducing the rate
impact of the Compliance Plan.

With the addition of the scrubber, the Company expects to
exceed the minimum compliance requirements of Phase I of the
Clean Air Act and have available unused allowances, called
"overcompliance allowances", for sale to others.  Proceeds
from sales of overcompliance allowances will also be passed
through to customers.

The scrubbing process utilized by the Culley scrubber
produces a salable by-product, gypsum, a substance commonly
used in wallboard and other products.  In December 1993, the
Company finalized negotiations for the sale of an estimated
150,000 to 200,000 tons annually of gypsum to a major
manufacturer of wallboard.  The agreement will enable the
Company to reduce certain operating costs and to credit
ratepayers with the proceeds from the sale of the gypsum,
further mitigating the rate impact of the Compliance Plan.

The rate impact related to the Compliance Plan, estimated to
be 7-10%, is being phased in over a three year period
beginning in October 1993.  (See "Rate and Regulatory
Matters" for further discussion.)

DEMAND SIDE MANAGEMENT.

  In October 1991, the IURC issued an order approving
expenditures by the Company for development and
implementation of demand side management (DSM) programs. 
The primary purpose of the DSM programs is to reduce the
demand on the Company's generating capacity at the time of
system peak requirements, thereby postponing or avoiding the
addition of generating capacity.  Thus, the order of the
IURC provided that the accounting and ratemaking treatment
of DSM program expenditures should generally parallel the
treatment of construction of new generating facilities.

Most of the DSM program expenditures are being capitalized
per the IURC order and will be amortized over a 15 year
period beginning at the time the Company reflects such costs
in its rates.  The Company is requesting recovery of these
costs in its general electric rate increase request filed
December 22, 1993 (see "Rates and Regulatory Matters" for
further discussion).  In addition to the recovery of DSM
program costs through base rate adjustments, the Company is
collecting, through a quarterly rate adjustment mechanism,
most of the margin on sales lost due to the implementation
of DSM programs.

The Company expects to incur costs of approximately $51
million on DSM programs during the 1994-1998 period.  By
1998, approximately 108 megawatts of capacity are expected
to be postponed or eliminated due to these programs.  Based
on the latest projections, the expenditures for DSM
programs, as approved by the IURC, will total an estimated
$195 million through the year 2012 and result in overall
savings of $160 million to ratepayers due to deferring the
construction of about 156 megawatts of new generating
capacity.

INTEGRATED RESOURCE PLAN.

  In November 1993, the Company filed with the IURC a
biannual update to its Integrated Resource Plan (IRP),
including the DSM program expenditures referred to above. 
The IRP process is a least-cost approach to determining the
combination of new generating facilities and conservation
and load management options that will best meet customers'
future energy needs.

 20
The 1993 IRP update was the result of a nine month
evaluation of detailed technology costs, customer energy use
patterns, and market information, and includes natural gas
conservation options not in the initial 1991 IRP.  If the
new IRP is approved by the IURC, the Company will implement
several new DSM programs recommended by the IRP, including a
residential weatherization pilot project.  Supply side
options recommended by the IRP include strategies to
diversify the Company's natural gas suppliers, maximize the
use of economical purchased power during peak usage periods,
and expand the strategic use of the Company's gas storage
fields.

While the Company intends to aggressively utilize various
DSM programs to help delay the need for additional power
sources, the 1993 IRP forecasts the need of a 125 megawatt
base-load generating plant in the early 21st century to meet
the future electricity needs of the Company's customers.

POSTEMPLOYMENT BENEFITS.

  In November 1992, the FASB issued SFAS No. 112,
"Employers' Accounting for Postemployment Benefits",
effective for years beginning after December 15, 1993, which
will require the Company to accrue the estimated cost of
benefits provided to former or inactive employees after
employment but before retirement age.  Postemployment
benefits include, but are not limited to, salary
continuation, supplemental unemployment benefits, severance
benefits, disability-related benefits (including workers'
compensation), and continuation of benefits such as health
care and life insurance coverage.  The Company will adopt
SFAS No. 112 on January 1, 1994.  The impact of the new
statement will not have a material impact on financial
position or results of operations.

LIQUIDITY AND CAPITAL RESOURCES.

  The Company experienced record earnings per share during
1993, and financial performance continued to be solid. 
Internally generated cash, bolstered by the increased retail
sales, provided over 74% of the Company's construction and
DSM program expenditures, despite the requirements of the
Culley scrubber project.  Earnings continued to be of high
quality, of which 11.4% represented allowance for funds used
during construction.  The ratio of earnings to fixed charges
(SEC method) was 3.8:1, the embedded cost of long-term debt
is approximately 6.6%, and the Company's long-term debt
continues to be rated AA by major credit rating agencies.

The Company has access to outside capital markets and to
internal sources of funds that together should provide
sufficient resources to meet capital requirements.  The
Company does not anticipate any changes that would
materially alter its current liquidity.

On April 30, 1993, the Company called $84.5 million of its
first mortgage bonds at a premium, plus accrued interest. 
The bonds called were the 8% due 2001, the 8% due 2002, the
8.35% due 2007, the 9-1/4% due 2016, and the 8-5/8% due
2017.  The bonds called, having a weighted average interest
rate of 8.5%, were refunded with two $45 million issues
carrying interest rates of 6% and 7.6%, due 1999 and 2023,
respectively.

On May 11, 1993, the Company issued two series of adjustable
rate first mortgage bonds in connection with the sale of
Warrick County, Indiana environmental improvement revenue
bonds.  The proceeds of the bonds have been placed in trust
and are being used to finance a portion of the Culley
scrubber project.  The first series of bonds was for $22.2
million due 2028, the interest rate of which is fixed at
4.65% through April 30, 1998.  The second series of bonds
was for $22.8 million due 2023; the interest rate of this
series is fixed at 6% through maturity.

On June 15, 1993, the Company retired $20 million of 8.50%
first mortgage bonds maturing in June of 1993 with $20
million of 7-5/8% first mortgage bonds due 2025.

The only financing activity during 1992 was in December when
the Company called 75,000 shares of 8.75% series cumulative
preferred stock at $102 per share, plus accrued dividends,
with the issuance of 75,000 shares of 6.50% series
redeemable cumulative preferred stock, at $100 per share.

During the five year period 1994-1998, the Company
anticipates that a total of $47.7 million of debt securities
will be redeemed.

 21
Construction expenditures, including $4.5 million for DSM
programs, totaled $80.1 million during 1993, compared to the
$52.1 million expended in 1992.  As discussed in "Clean Air
Act", construction of the new scrubber continued in 1993,
requiring $49.2 million.  The remainder of the 1993
construction expenditures consisted of the normal
replacements and improvements to gas and electric
facilities.

The Company expects that construction requirements for the
years 1994-1998 will total approximately $270 million. 
Included in this amount is approximately $44 million to
comply with the Clean Air Act amendments by 1995 and
approximately $51 million of capitalized expenditures to
develop and implement DSM programs.  While the Company
expects the majority of the construction program and debt
redemption requirements to be provided by internally
generated funds, external financing requirements of $50-70
million are anticipated.

At year end, the Company had $11 million in short-term
borrowings, leaving unused lines of credit and trust demand
note arrangements totaling $16 million.

The Company is confident that its long-term financial
objectives, which include maintaining a capital structure
near 45-50% long-term debt, 3-7% preferred stock, and 43-48%
common equity, will continue to be met, while providing for
future construction and other capital requirements.

 22
Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                  Page No.
1. Financial Statements:

      Report of Independent Public Accountants       23

      Consolidated Statements of Income for the
      years ended December 31, 1993, 1992 and 1991   24

      Consolidated Statements of Cash Flows for the
      years ended December 31, 1993, 1992 and 1991   25

      Consolidated Balance Sheets - December 31,
      1993 and 1992                                26 - 27

      Consolidated Statements of Capitalization -
      December 31, 1993 and 1992                     28

      Consolidated Statements of Retained Earnings
      for the years ended December 31, 1993,
      1992 and 1991                                  29

      Notes to Consolidated Financial Statements   29 - 39

2. Supplementary Information:

      Selected Quarterly Financial Data              40

3. Supplemental Schedules:

      Schedule V - Property, Plant and Equipment
      for the years ended December 31, 1993, 1992
      and 1991                                     44 - 46

      Schedule VI - Accumulated Provision for
      Depreciation and Amortization of Property,
      Plant and Equipment for the years ended
      December 31, 1993, 1992 and 1991             47 - 49

      Schedule VIII - Valuation and Qualifying
      Accounts and Reserves for the years ended
      December 31, 1993, 1992 and 1991               50

      Schedule IX - Short-Term Borrowings            51

      Schedule X - Supplementary Income Statement
      Information                                    52

      Schedule XIII - Other Investments              53


   All other schedules have been omitted as not applicable
   or not required or because the information required to
   be shown is included in the Consolidated Financial
   Statements or the accompanying Notes to Consolidated
   Financial Statements.

 23
            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of Southern Indiana Gas and Electric
Company:

    We have audited the consolidated balance sheets and
consolidated statements of capitalization of SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY (an Indiana corporation)
AND SUBSIDIARY as of December 31, 1993 and 1992, and the
related consolidated statements of income, retained earnings
and cash flows for each of the three years in the period
ended December 31, 1993.  These financial statements and the
supplemental schedules referred to below are the
responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial
statements and supplemental schedules based on our audits.

    We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.

    In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects,
the financial position of Southern Indiana Gas and Electric
Company and Subsidiary as of December 31, 1993 and 1992, and
the results of their operations and their cash flows for
each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting
principles.

    As discussed in Note 1, effective January 1, 1993, the
Company changed its methods of accounting for income taxes
and postretirement benefits other than pensions.

    Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a whole. 
The supplemental schedules listed under Item 8 (3) are
presented for the purposes of complying with the Securities
and Exchange Commission's rules and are not part of the
basic financial statements.  These supplemental schedules
have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial
data required to be set forth therein in relation to the
basic financial statements taken as a whole.

                                                         
    ARTHUR ANDERSEN & CO.
    Chicago, Illinois
    January 24, 1994

 24

SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
CONSOLIDATED  STATEMENTS OF INCOME
                                for the years ended December 31,
                                           1993       1992        1991
(in thousands except per share data)
                                                       
OPERATING REVENUES
  Electric                               $258,405   $243,077    $263,887 
  Gas                                      70,116     62,870      58,695 
   Total operating revenues               328,521    305,947     322,582 

OPERATING EXPENSES
  Operation:
   Fuel for electric generation            81,080     81,239      90,054 
   Purchased electric energy                9,348      2,914       5,653 
   Cost of gas sold                        50,544     46,063      40,694 
   Other                                   40,541     35,952      37,278 
     Total operation                      181,513    166,168     173,679 
  Maintenance                              26,655     21,947      27,117
  Depreciation and amortization            36,939     36,213      36,795 
  Federal and state income taxes           18,325     16,490      19,397 
  Property and other taxes                 13,447     14,210      12,438 
   Total operating expenses               276,879    255,028     269,426

OPERATING INCOME                           51,642     50,919      53,156 
  Other Income:
   Allowance for other funds used
    during construction                     3,092        988         974 
   Interest                                   920      1,001         907 
   Other, net                               2,530      2,100       2,680 
                                         ________   ________    ________
                                            6,542      4,089       4,561 

INCOME BEFORE INTEREST CHARGES             58,184     55,008      57,717 

  Interest Charges:
   Interest on long-term debt              18,437     17,768      18,238 
   Amortization of premium, discount,
    and expense on debt                       773        446         740 
   Other interest                             746        461         719 
   Allowance for borrowed funds
    used during construction               (1,425)      (434)       (493)
                                         ________   ________    ________
                                           18,531     18,241      19,204 

NET INCOME                                 39,653     36,767      38,513 

  Preferred Stock Dividends                 1,105      1,267       1,281 

NET INCOME APPLICABLE TO COMMON STOCK    $ 38,548   $ 35,500    $ 37,232 

AVERAGE COMMON SHARES OUTSTANDING          15,705     15,705      15,705 

EARNINGS PER SHARE OF COMMON STOCK          $2.45      $2.26       $2.37 

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.

 25

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                for the years ended December 31,
                                           1993       1992        1991
                                         (in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
                                                       
Net Income                               $ 39,653   $ 36,767    $ 38,513 
Adjustments to reconcile net income
 to net cash provided by operating activities:
   Depreciation and amortization           36,939     36,213      36,795 
   Deferred income taxes and investment
    tax credits, net                        9,459         26         285 
   Allowance for other funds used
    during construction                    (3,092)      (988)       (974)
   Change in assets and liabilities:
     Receivables, net                      (4,076)     3,770      (2,795)
     Inventories                            9,734     (7,232)      1,586 
     Coal contract settlement             (13,295)         -           - 
     Accounts payable                        (185)     4,739      (2,777)
     Accrued taxes                         (1,837)     2,387         785 
     Refunds from gas suppliers             1,545         12         290 
     Refunds to customers                    (412)    (3,499)     (3,674)
     Accrued coal liability                 8,749          -           - 
     Other                                  7,120     (1,886)      1,564 
   Net cash provided by operating
    activities                             90,302     70,309      69,598 
CASH FLOWS FROM INVESTING ACTIVITIES
  Construction expenditures (net of allowance for
   other funds used during construction)  (72,487)   (49,203)    (34,733)
  Demand side management program
   expenditures                            (4,530)    (1,920)       (962)
  Investments in leveraged leases          (2,769)         -           - 
  Purchases of investments                 (6,569)   (20,532)    (23,995)
  Sales of investments                      7,016     21,570      23,981 
  Investments in partnerships              (2,488)    (2,476)     (2,723)
  Change in nonutility property              (862)    (1,258)       (440)
  Other                                       307      1,031         247 
   Net cash used in investing activities  (82,382)   (52,788)    (38,625)
CASH FLOWS FROM FINANCING ACTIVITIES
  First mortgage bonds                    155,000          -           - 
  Preferred stock                               -      7,500           - 
  Dividends paid                          (26,391)   (25,737)    (24,844)
  Reduction in preferred stock
   and long-term debt                    (104,500)    (7,685)       (110)
  Change in environmental improvement
   funds held by Trustee                  (22,613)         -           - 
  Change in notes payable                   7,610      4,426      (1,224)
  Other                                    (5,849)      (496)       (158)
   Net cash provided (used)
    in financing activities                 3,257    (21,992)    (26,336)
NET  INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                      11,177     (4,471)      4,637 
CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                        3,328      7,799       3,162 
CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                           $ 14,505   $  3,328    $  7,799 

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.

 26

CONSOLIDATED BALANCE SHEETS
                                           December 31,
                                                1993           1992 
                                                 (in thousands)
                                                       
ASSETS
Utility Plant, at original cost:
  Electric                                    $879,476       $865,862
  Gas                                          107,100        103,138
                                              ________       ________
                                               986,576        969,000
  Less-Accumulated provision for depreciation  423,730        391,541
                                              ________       ________
                                               562,846        577,459
  Construction work in progress                 72,615         19,668
   Net Utility Plant                           635,461        597,127


Other Investments and Property:
  Investments in leveraged leases               34,924         32,332
  Investments in partnerships                   25,023         22,851
  Environmental improvement funds
   held by Trustee                              22,613              -
  Nonutility property and other                  7,997          7,135
                                              ________       ________
                                                90,557         62,318

Current Assets:
  Cash and cash equivalents                      5,756          3,328
  Restricted cash                                8,749              -
  Temporary investments, at cost which
   approximates market                           6,540          6,988
  Receivables, less allowance of $166
   and $136, respectively                       28,360         24,284
  Inventories                                   38,189         47,923
  Other current assets                           3,047          2,460
                                              ________       ________
                                                90,641         84,983

Deferred Charges:
  Coal contract settlement                      13,295              -
  Unamortized premium on reacquired debt         7,100          3,118
  Postretirement benefits other than pensions    4,125              -
  Demand side management program                 7,411          2,881
  Other deferred charges                        11,433         10,854
                                              ________       ________
                                                43,364         16,853
                                              ________       ________
                                              $860,023       $761,281

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.

 27
                                       
                                           December 31,
                                                1993           1992  
                                                   (in thousands)
SHAREHOLDERS' EQUITY AND LIABILITIES
                                                       
Common Stock                                  $102,691       $102,691
Retained Earnings                              204,058        190,796
                                              ________       ________
                                               306,749        293,487
Less Treasury Stock, at cost                    24,540         24,540
                                              ________       ________
   Common Shareholders' Equity                 282,209        268,947
Cumulative Nonredeemable Preferred Stock        11,090         11,090
Cumulative Redeemable Preferred Stock            7,500          7,500
Cumulative Special Preferred Stock               1,015          1,015
Long-Term Debt, net of current maturities      261,100        198,764
Long-Term Partnership Obligations, 
  net of current maturities                     12,881         13,255
   Total capitalization, excluding bonds
    subject to tender (see Consolidated
    Statements of Capitalization)              575,795        500,571

Current Liabilities:
   Current Portion of Adjustable Rate
    Bonds Subject to Tender                     41,475         31,500
   Current Maturities of Long-Term Debt, Interim Financing,
    and Long-Term Partnership Obligations:
     Maturing long-term debt                       763         20,859
     Notes payable                              11,000          5,000
     Partnership obligations                     3,849          2,859
       Total current maturities of long-term
        debt, interim financing, and
        long-term partnership obligations       15,612         28,718
Other Current Liabilities:
     Accounts payable                           33,753         33,938
     Dividends payable                             135            135
     Accrued taxes                               7,931          9,768
     Accrued interest                            4,517          5,117
     Refunds to customers                        3,398          2,537
     Accrued coal liability                      8,749              -
     Other accrued liabilities                  10,041          6,554
       Total other current liabilities          68,524         58,049
       Total current liabilities               125,611        118,267

Deferred Credits and Other:
   Accumulated deferred income taxes           117,267        113,138
   Accumulated deferred investment tax credits, being
    amortized over lives of property            26,549         28,416
   Regulatory income tax liability               7,197              -
   Postretirement benefits other
    than pensions                                4,125              -
   Other                                         3,479            889
                                              ________       ________
                                               158,617        142,443
                                              ________       ________
                                              $860,023       $761,281

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.

 28
CONSOLIDATED STATEMENTS OF CAPITALIZATION
                                           December 31, 
                                                1993           1992   
                                                   (in thousands)
COMMON SHAREHOLDERS' EQUITY
                                                       
  Common Stock, without par value, authorized
  50,000,000 shares, issued 16,815,604 shares $102,691       $102,691 
  Retained Earnings, $2,209,642 restricted
   as to payment of cash dividends on
   common stock                                204,058        190,796
                                              ________       ________
                                               306,749        293,487 
  Less Treasury Stock, at cost,
   1,110,177 shares                             24,540         24,540
                                              ________       ________ 
                                               282,209        268,947 
PREFERRED STOCK
  Cumulative, $100 par value, authorized
   800,000 shares, issuable in series:
    Nonredeemable
      4.8% Series, outstanding 85,895 shares,
       callable at $110 per share                8,590          8,590 
      4.75% Series, outstanding 25,000 shares,
       callable at $101 per share                2,500          2,500 
                                              ________       ________
                                                11,090         11,090 
    Redeemable
      6.50% Series, outstanding 75,000 shares, 
       redeemable at $100 per share
       December 1, 2002                          7,500          7,500 

SPECIAL PREFERRED STOCK
  Cumulative, no par value, authorized 5,000,000
   shares, issuable in series: 8-1/2% series,
   outstanding 10,150 shares, redeemable
   at $100 per share                             1,015          1,015 

LONG-TERM DEBT, NET OF CURRENT MATURITIES
  First mortgage bonds                         254,740        194,315 
  Notes payable                                  7,263          5,456 
  Unamortized debt premium and discount, net      (903)        (1,007)
                                              ________       ________
                                               261,100        198,764 
LONG-TERM PARTNERSHIP OBLIGATIONS,
 NET OF CURRENT MATURITIES                      12,881         13,255 

CURRENT PORTION OF ADJUSTABLE RATE POLLUTION  
 BONDS SUBJECT TO TENDER, DUE
  2015, Series A, presently 5.75%                9,975              - 
  2015, Series B, presently 2.7%                31,500         31,500
                                              ________       ________ 
                                                41,475         31,500 
     Total capitalization, including
       bonds subject to tender                $617,270       $532,071 

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.


 29

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

                                for the years ended December 31,
                                           1993       1992        1991  
                                         (in thousands)
                                                       

Balance Beginning of Period              $190,796   $180,291    $166,622
Net income                                 39,653     36,767      38,513
                                         ________   ________    ________
                                          230,449    217,058     205,135
Preferred Stock Dividends                   1,105      1,235       1,281
Common Stock Dividends ($1.61 per share
 in 1993, $1.56 per share in 1992,
 and $1.50 per share in 1991)              25,286     24,502      23,563
Capital Stock Expenses                          -        525           -
                                         ________   ________    ________
                                           26,391     26,262      24,844
Balance End of Period (See Consolidated
 Statements of Capitalization
 for restriction)                        $204,058   $190,796    $180,291

The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION

   The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary
Southern Indiana Properties, Inc.  All significant
intercompany transactions and balances have been eliminated.

   CUSTOMER RECEIVABLES, SALES, AND TRANSPORTATION REVENUES 

   The Company's customer receivables, gas and electric
sales, and gas transportation revenues are primarily derived
from supplying electricity and natural gas to a broadly
diversified base of residential, commercial, and industrial
customers located in a southwestern region of Indiana.  The
Company serves 118,163 electric customers in the city of
Evansville and 74 other communities and serves 100,398 gas
customers in the city of Evansville and 63 other
communities.

   UTILITY PLANT

   Utility plant is stated at the historical original cost
of construction.  Such cost includes payroll-related costs
such as taxes, pensions, and other fringe benefits, general
and administrative costs, and an allowance for the cost of
funds used during construction (AFUDC), which represents the
estimated debt and equity cost of funds capitalized as a
cost of construction.  While capitalized AFUDC does not
represent a current source of cash, it does represent a
basis for future cash revenues through depreciation and
return allowances.  The weighted average AFUDC rate (before
income tax) used by the Company was 10.5% in 1993, 11.5% in
1992, and 11.2% in 1991.

   DEPRECIATION

   Depreciation of utility plant is provided using the
straight-line method over the estimated service lives of the
depreciable plant.  Provisions for depreciation, expressed
as an annual percentage of the cost of average depreciable
plant in service, were 4.0% for electric and 3.7 % for gas
in 1993, 4.0% for  electric and 3.9% for gas in 1992, and
4.0% for both electric and gas in 1991.

 30
  INCOME TAXES

  The Company utilizes a comprehensive interperiod income
tax allocation policy, providing deferred taxes on temporary
timing differences.  Investment tax credits recorded have
been deferred and are amortized through credits to income
over the lives of the related property.
  Effective January 1, 1993, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes".  SFAS No. 109 requires an
asset and liability approach for financial accounting and
reporting for income taxes rather than the deferred method. 
The new standard requires the Company to establish deferred
tax assets and liabilities, as appropriate, for all
temporary differences and to adjust deferred tax balances to
reflect changes in tax rates expected to be in effect during
the periods the temporary differences reverse.  In the first
quarter of 1993, because of the effects of rate regulation,
the Company recorded an increase of $4,987,000 in deferred
tax assets and a decrease of $8,551,000 in deferred tax
liabilities, and established a corresponding regulatory
liability of $13,538,000, primarily to recognize the
probable future reduction in rates to flow back to customers
deferred taxes previously collected in excess of current tax
rates.  The adoption of this standard did not have a
material impact on results of operations, cash flow, or
financial position.
  The components of the net deferred income tax liability
at January 1, 1993 and December 31, 1993 are as follows:

                                          January 1   December 31
                                                   (in thousands)
                                                         
Deferred Tax Liabilities:
    Depreciation and cost recovery 
     timing differences                            $96,460     $100,796 
    Deferred fuel costs, net                           257        5,307 
    Leveraged leases                                25,112       27,064 
    Regulatory assets recoverable through
     future rates                                   26,246       27,660 
Deferred Tax Assets:
    Unbilled revenue                                (6,428)      (6,149)
    Regulatory liabilities to be settled
     through future rates                          (39,784)     (34,857)
    Other, net                                      (2,264)      (2,554)
Net deferred income tax liability                  $99,599     $117,267 


     Of the $17,668,000 increase in the net deferred income
tax liability from January 1, 1993 to December 31, 1993,
$11,263,000 is due to current year deferred federal and
state income tax expense and the remaining $6,405,000
increase is primarily a result of the decrease in the net
regulatory liability.
     The components of current and deferred income tax
expense for the years ended December 31 are as follows:

                                    1993      1992       1991   
                                           (in thousands)
                                                       
Current
  Federal                                  $ 9,320   $16,152    $17,967 
  State                                      1,497     2,543      2,732
Deferred, net
  Federal                                    7,958      (624)       252
  State                                      1,418       292        323
Investment tax credit, net                  (1,868)   (1,873)    (1,877)
Income tax expense as shown on Consolidated
 Statements of Income                       18,325    16,490     19,397 
Current income tax expense included 
 in Other Income                            (3,608)   (3,203)    (4,087)
Deferred income tax expense included
 in Other Income                             1,887     1,322      3,111 
Total income tax expense                   $16,604   $14,609    $18,421 


 31
    The components of deferred federal and state income tax
expense for the years ended December 31 are as follows:

                                    1993      1992       1991   
                                           (in thousands)
                                                       
Depreciation and cost recovery
 timing differences                        $ 3,924   $1,234     $1,858 
Debt component of deferred return
 on A. B. Brown Unit 2                           -      (37)      (357)
Deferred fuel costs                          5,593      340        (21)
Unbilled revenue                                43   (1,054)      (359)
Leveraged leases                             1,887    1,322      2,905 
Other, net                                    (184)    (815)      (340)
Total deferred federal and state
 income tax expense                        $11,263   $  990     $3,686 


    As a result of the Omnibus Budget Reconciliation Act of
1993, signed into law on August 10, 1993, the Company
provided additional income tax expense of $524,000 in 1993
to recognize the impact of the 1% increase in federal income
tax rates.  A reconciliation of the statutory tax rates to
the Company's effective income tax rate for the years ended
December 31 is as follows:

                                  1993      1992       1991
                                                       
Statutory federal and state rate           37.9%     37.0%      37.0%
Equity portion of allowance for funds
 used during construction                  (2.1)     (0.7)      (0.6)
Equity portion of deferred return
 on A. B. Brown Unit 2                        -       0.1        0.9 
Book depreciation over related tax
 depreciation-nondeferred                   1.9       2.0        2.2 
Amortization of deferred investment
 tax credit                                (3.3)     (3.7)      (3.3)
Low income housing credit                  (4.4)     (4.3)      (2.3)
Other, net                                 (0.5)     (2.0)      (1.5)
Effective tax rate                         29.5%     28.4%      32.4%


    PENSION PLANS

    The Company has trusteed, noncontributory defined
benefit plans which cover eligible full-time regular
employees.  The plans provide retirement benefits based on
years of service and the employee's highest 60 consecutive
months' base compensation during the last 120 months of
employment.  The funding policy of the Company is to
contribute amounts to the plans equal to at least the
minimum funding requirements of the Employee Retirement
Income Security Act of 1974 (ERISA) but not in excess of the
maximum deductible for federal income tax purposes.  The
plans' assets as of December 31, 1993 consist of investments
in interest bearing obligations and common stocks of 51% and
49%, respectively.
    The components of net pension cost for the years ended
December 31 are as follows:

                                    1993      1992       1991  
                                           (in thousands) 
                                                       
Service cost - benefits earned
 during the period                         $ 1,454   $ 1,408    $ 1,324 
Interest cost on projected 
 benefit obligation                          3,605     3,390      3,152 
Actual return on plan assets                (2,669)   (3,060)    (9,759)
Net amortization and deferral               (1,712)   (1,319)     6,071 
Net pension cost                           $   678   $   419    $   788 


    Part of the pension cost is charged to construction and
other accounts.

    The funded status of the retirement plans at December
31 is as follows:

                                    1993      1992   
                                                     
(in thousands)
                                               
Actuarial present value of:
  Vested benefit obligation                $44,502   $37,538 
  Accumulated benefit obligation           $44,742   $37,605 
Plan assets at fair value                  $51,869   $51,559 
Projected benefit obligation                56,230    46,075 
(Deficit)excess of assets over projected
 benefit obligation                         (4,361)    5,484 
Remaining unrecognized transitional asset   (3,904)   (4,322)
Unrecognized net loss (gain)                 5,621    (3,205)
Accrued pension liability                  $(2,644)  $(2,043)


 32
    The projected benefit obligation at December 31, 1992
was determined using an assumed discount rate of 8%.  Due to
the decline in yields on high quality fixed income
investments, a discount rate of 7% was used to determine the
projected benefit obligation at December 31, 1993.  For both
periods, the long-term rate of compensation increases was
assumed to be 5%, and the long-term rate of return on plan
assets was assumed to be 8%.  The transitional asset is
being recognized over approximately 15, 18, and 14 years for
the Salaried, Hourly, and Hoosier plans, respectively.

    POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

    The Company provides certain postretirement health care
and life insurance benefits for retired employees and their
dependents through fully insured plans.  Retired employees
are eligible for lifetime medical and life insurance
coverage if they retire on or after attainment of age 55,
regardless of length of service.  Their spouses are eligible
for medical coverage until age 65.  Prior to age 65,
retirees are covered by the same insured health care plans
provided to active employees.  After attaining age 65, the
retirees are covered by insured Medicare supplement plans. 
Additionally, the Company reimburses the retirees for
Medicare Part B premiums incurred.  The health care plans
pay stated percentages of covered medical expenses incurred,
after subtracting payments by Medicare or other providers
and after a stated deductible has been met.  Prior to 1993,
the cost of retiree health care and life insurance benefits
was recognized as insurance premiums were paid, which was
consistent with current ratemaking practices.  The costs for
retirees totaled $670,000 and $598,000 in 1992 and 1991,
respectively.
    Effective January 1, 1993, the Company adopted SFAS No.
106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" which requires the expected cost of
these benefits be recognized during the employees' years of
service.  The actuarial assumptions and calculations
involved in determining the recognized costs closely
parallel pension accounting requirements.  As authorized by
the Indiana Utility Regulatory Commission in a December 30,
1992 generic ruling, the Company is deferring as a
regulatory asset the additional SFAS No. 106 costs accrued
over the costs of benefits actually paid after date of
adoption, but prior to inclusion in rates.  As required by
the generic order, the Company anticipates including the
additional costs of the benefits in rates within four years
after date of adoption of SFAS No. 106.
    The components of the net periodic other postretirement
benefit cost for the year ended December 31, 1993, is as
follows:


(in thousands)
                                                  
Service cost-benefits earned during the period       $  924
Interest cost on accumulated benefit obligation       2,463
Amortization of transition obligation                 1,472
Net periodic postretirement benefit cost             $4,859
Deferred postretirement benefit obligation            4,125
Charged to operations and construction               $  734


    The 1993 cost determined under the new standard
includes the amortization of the discounted present value of
the obligation at the adoption date, $29,400,000, over a 20
year period.
    Reconciliation of the accumulated postretirement
benefit obligation to the accrued liability for
postretirement benefits as of January 1, 1993 and December
31, 1993, is as follows:

                                  January 1 December 31
                                           (in thousands)
                                               
Accumulated other postretirement
 benefit obligation:
   Retirees                                $12,159   $13,096 
   Other fully eligible participants         6,013     7,120 
   Other active participants                11,262    15,725 
Total accumulated benefit obligation        29,434    35,941 
Unrecognized transition obligation         (29,434)  (27,962)
Unrecognized net loss                            -    (3,854)
Accrued postretirement benefit liability   $     -   $ 4,125 


    The assumptions used to develop the accumulated
postretirement benefit obligation at January 1, 1993
included a discount rate of 8.5% and a health care cost
trend rate applicable to gross eligible charges of 14% in
1993 declining to 6% in 2008, and remaining level
thereafter.  Due to the decline in yields on high quality
fixed income investments and general inflation, a discount
rate of 7.25% and a health care cost trend rate of 13.5% in
1994 declining to 5.5% in 2008 were used to determine the
accumulated postretirement benefit obligation at December
31, 1993.  The estimated cost of these future benefits could

 33
be significantly impacted by future changes in health care
costs, work force demographics, interest rates, or plan
changes.  A 1% increase in the assumed health care cost
trend rate each year would increase the aggregate service
and interest costs for 1993 by $900,000 and the accumulated
postretirement benefit obligation by $4,700,000.  The
Company currently anticipates continuing its policy of
funding postretirement benefits costs other than pensions as
incurred.  

    POSTEMPLOYMENT BENEFITS

    In November 1992, the FASB issued SFAS No. 112,
"Employers' Accounting for Postemployment Benefits", which
will require the Company to accrue the estimated cost of
benefits provided to former or inactive employees after
employment but before retirement.
    The Company will  adopt SFAS No. 112 on January 1,
1994.  The impact of the new statement will not have a
material impact on financial position or results of
operations. 

    CASH FLOW INFORMATION

    For the purposes of the Consolidated Balance Sheets and
the Consolidated Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased with
an original maturity of three months or less to be cash
equivalents.
    The Company, during 1993, 1992, and 1991, paid interest
(net of amounts capitalized) of $18,359,000, $17,890,000,
and $18,502,000, respectively, and income taxes of
$10,248,000, $14,291,000, and $18,289,000, respectively. 
The Company is involved in several partnerships which are
partially financed by partnership obligations amounting to
$16,730,000 and $16,114,000 at December 31, 1993 and 1992,
respectively.

    INVENTORIES

    The Company accounts for its inventories under the
average cost method except for gas in underground storage
which is accounted for under two inventory methods:  the
average cost method for the Company's Hoosier Division
(formerly Hoosier Gas Corporation) and the last-in, first-
out (LIFO) method for all other gas in storage.  Inventories
at December 31 are as follows:

                                              1993       1992  
                                                       (in thousands) 
                                                          
Fuel (coal and oil) for electric generation          $14,533    $24,718
Materials and supplies                                13,720     13,686
Gas in underground storage - at LIFO cost              6,907      6,601
                           - at average cost           3,029      2,918
Total inventories                                    $38,189    $47,923


    Based on the December 1993 price of gas purchased, the
cost of replacing the current portion of gas in underground
storage exceeded the amount stated on a LIFO basis by
approximately $12,400,000 at December 31, 1993.

    OPERATING REVENUES AND FUEL COSTS

    Revenues include all gas and electric service billed
during the year except as discussed below.
    All metered gas rates contain a gas cost adjustment
clause which allows for adjustment in charges for changes in
the cost of purchased gas.  As ordered by the IURC, the
calculation of the adjustment factor is based on the
estimated cost of gas in a future quarter.  The order also
provides that any under- or overrecovery caused by variances
between estimated and actual cost in a given quarter, as
well as refunds from its pipeline suppliers, will be
included in adjustment factors of four future quarters
beginning with the second succeeding quarter's adjustment
factor.  
    All metered electric rates contain a fuel adjustment
clause which allows for adjustment in charges for electric
energy to reflect changes in the cost of fuel and the net
energy cost of purchased power.  As ordered by the IURC, the
calculation of the adjustment factor is based on the
estimated cost of fuel and the net energy cost of purchased
power in a future quarter.  The order also provides that any
under- or overrecovery caused by variances between estimated
and actual cost in a given quarter will be included in the
second succeeding quarter's adjustment factor.
    The Company also collects through a quarterly rate
adjustment mechanism, the margin on electric sales lost due
to the implementation of demand side management programs. 
Reference is made to "Demand Side Management" in
Management's Discussion and Analysis of Operations and
Financial Condition for further discussion.
    The Company records monthly any under- or overrecovery
as an asset or liability, respectively, until such time as
it is billed or refunded to its customers.  The IURC reviews
for approval the adjustment clauses on a quarterly basis.

 34
    The cost of gas sold is charged to operating expense as
delivered to customers and the cost of fuel for electric
generation is charged to operating expense when consumed.

2. REGULATORY AND OTHER MATTERS

    The IURC has jurisdiction over all investor-owned gas
and electric utilities in Indiana.  The FERC has
jurisdiction over those investor-owned utilities that make
wholesale energy sales.  These agencies regulate the
Company's utility business operations, rates, accounts,
depreciation allowances, services, security issues, and the
sale and acquisition of properties.
    On July 21, 1993, the IURC approved an overall increase
of approximately 8%, or $5.5 million in revenues, in the
Company's base gas rates.  The increase is to be implemented
in two equal steps.  The first step of the rate adjustment,
approximately 4%, took place August 1, 1993; the second step
will become effective August 1, 1994.
    On May 24, 1993, the Company petitioned the IURC for an
adjustment in its base electric rates representing the first
step in the recovery of the financing costs on its
investment through March 31, 1993 in the Clean Air Act
Compliance project presently being constructed at the Culley
Generating Station.  The majority of the costs are for the
installation of a sulfur dioxide scrubber on Culley Units 2
and 3.  On September 15, 1993, the IURC granted the
Company's request for a 1% revenue increase (approximately
$1,800,000 on an annual basis), which took effect October 1,
1993.  The Company anticipates petitioning the IURC in
February 1994 for a 2-3% increase for financing costs
related to project construction expenditures incurred since
April 1, 1993, with implementation of the new rates
effective mid-1994.
    On December 22, 1993, the Company filed a request with
the IURC for a general electric rate increase.  This
adjustment, expected to occur in early 1995, is estimated to
be 6-9% and is necessary to recover financing costs related
to the balance of the scrubber project construction
expenditures, costs related to the operation of the
scrubber, and certain nonscrubber-related costs such as
additional costs incurred for postretirement benefits other
than pensions beginning in 1993 and the recovery of demand
side management program expenditures.
    In April 1992, the Federal Energy Regulatory Commission
(FERC) issued Order No. 636 (the Order) which required
interstate pipelines to restructure their services.  In
August 1992, the FERC issued Order No. 636-A which
substantially reaffirmed the content of the original Order. 
On November 2, 1992, the Company's major pipeline , Texas
Gas Transmission Corporation (TGTC), filed a recovery
implementation plan with the FERC as part of its revised
compliance filing regarding the Order.  On October 1, 1993,
the FERC accepted, subject to certain conditions, the TGTC
recovery implementation plan.
    Under the new TGTC transportation tariffs, which became
effective November 1, 1993, the Company will incur
additional annual demand-related charges of approximately
$1.9 million.  Savings from lower volume-related
transportation costs will partially offset the additional
charges.  TGTC has not yet determined the Company's
allocation of transition costs, however, an estimate of such
costs and implementation of revised TGTC tariffs to recover
such costs, are expected during the first quarter of 1994. 
Due to the anticipated regulatory treatment at the state
level, the Company does not expect the Order to have a
detrimental effect on its financial condition or results of
operations.
    Over the past several years, the Company has been
involved in contract negotiations and legal actions to
reduce its coal costs.  During 1992, the Company
successfully negotiated a new coal supply contract with a
major supplier which was retroactive to 1991 and effective
through 1995.  In 1993, the Company exercised a provision of
the agreement which allowed the Company to reopen the
contract for the modification of certain coal
specifications.  In response, the coal supplier elected to
terminate the contract enabling the Company to buy out the
remainder of its contractual obligations and acquire lower
priced spot market coal.
    The cost of the contract buyout in 1993, which was
based on estimated tons of coal to be consumed during the
agreement period, and related legal and consulting services,
totaled approximately $18 million.  The Company anticipates
that $2 million in additional buyout costs for actual tons
of coal consumed above the previously estimated amount may
be incurred during the 1994-1995 period.  On September 22,
1993, the IURC approved the Company's request to amortize
all buyout costs to coal inventory during the period July 1,
1993 through December 31, 1995 and to recover such costs
through the fuel adjustment clause beginning February 1994. 
As of December 31, 1993, $13,295,000 of settlement costs
paid to date had not yet been amortized to coal inventory. 
    The Company is currently in litigation with another
coal supplier in an attempt to restructure an existing
contract.   Under the terms  of the  contract, the Company
was allegedly obligated to take 600,000 tons of coal
annually.   In early 1993, the Company informed the supplier
that it would not require shipments under the contract until
later in 1993.   On March 26, 1993, the Company and the
supplier agreed to resume coal shipments under the terms of
their original contract except the invoiced price per ton
would be substantially lower than the contract price.  As
approved by the IURC, the Company has charged the full
contract price to coal inventory for subsequent recovery
through the fuel adjustment clause.  The difference between
the contract price and the invoice price has been deposited
in an escrow account with an offsetting accrued liability
which will be paid to either the Company's ratepayers or its
coal supplier upon resolution of the litigation.  The
escrowed amount was $8,749,000 at December 31, 1993.  This
litigation is scheduled for trial in June of 1994.  Since
the litigation arose due to the Company's efforts to reduce
fuel costs, management believes that any related costs
should be recoverable through the regulatory ratemaking
process.
     In late 1993, in a further effort to reduce coal
costs, the Company and the supplier entered into a letter
agreement, effective January 1, 1994, and until the
litigation is settled, whereby the Company will purchase an
additional 50,000 tons monthly  above the alleged base
requirements at a price lower than the original contract
price for tons over 50,000 per month. Reference is made to 

 35
"Rate and Regulatory Matters" in Management's Discussion and
Analysis of Operations and Financial Condition for further
discussion.

3. SOUTHERN INDIANA PROPERTIES, INC.

    Southern Indiana Properties, Inc. (SIPI), a wholly-
owned subsidiary, was formed to conduct nonutility 
investment activities while segregating such activities from
the Company's regulated utility business.  Net income for
the years 1993, 1992, and 1991 was $2,525,000, $2,321,000,
and $1,936,000, respectively, and is included in "Other,
net" in the Consolidated Statements of Income.  SIPI
investment activities consist principally of investments in
partnerships (primarily in real estate), leveraged leases,
and marketable securities.
    SIPI is a lessor in four leveraged lease agreements
under which an office building, a part of a reservoir,  an
interest in a paper mill, and passenger railroad cars are
leased to third parties.  The economic lives and lease terms
vary with the leases.  The total equipment and facilities
cost was approximately $101,200,000 and $83,400,000 at
December 31, 1993 and 1992, respectively.  The cost of the
equipment and facilities was partially financed by
nonrecourse debt provided by lenders, who have been granted
an assignment of rentals due under the leases and a security
interest in the leased property, which they accept as their
sole remedy in the event of default by the lessee.  Such
debt amounted to approximately $78,700,000 and $63,700,000
at December 31, 1993 and 1992, respectively.  The Company's
net investment in leveraged leases at those dates was
$8,184,000  and $7,191,000, respectively, as shown:

                                              1993       1992  
                                                     (in thousands)
                                                          
Minimum lease payments receivable                    $64,120    $64,046
Estimated residual value                              22,095     18,544
Less: Unearned income                                 51,291     50,258
Investment in lease financing receivables and loans   34,924     32,332
Less: Deferred taxes arising from leveraged leases    26,740     25,141
Net investment in leveraged leases                   $ 8,184    $ 7,191


4. SHORT-TERM FINANCING

    The Company has trust demand note arrangements totaling
$17,000,000 with several banks, of which $11,000,000 was
utilized at December 31, 1993.  Funds are also borrowed from
time to time from banks on a short-term basis, made
available through lines of credit.  These available lines of
credit totaled $10,000,000 at December 31, 1993 of which
none was utilized at that date.

                                    1993     1992       1991
(in thousands)  
                                                       
Notes Payable:
   Balance at year end                     $11,000   $5,000     $    -
   Weighted average interest rate on
    year end balance                         3.44%    3.59%          -   
   Maximum amount outstanding during
    the year                               $17,000   $9,000     $2,000
   Average daily amount outstanding
    during the year                        $ 6,992   $  309     $   52
   Weighted average interest rate on
    average daily amount outstanding
    during the year                          3.36%    3.91%      6.55%

 
5. LONG-TERM DEBT

    The annual sinking fund requirement of the Company's
first mortgage bonds is 1% of the greatest amount of bonds
outstanding under the Mortgage Indenture.  This requirement
may be satisfied by certification to the Trustee of unfunded
property additions in the prescribed amount as provided in
the Mortgage Indenture.  The Company intends to meet the
1994 sinking fund requirement by this means and,
accordingly, the sinking fund requirement for 1994 is
excluded from current liabilities on the balance sheet.  At
December 31, 1993, $106,887,000 of the Company's utility
plant remained unfunded under the Company's Mortgage
Indenture.
    Several of the Company's partnership investments have
been financed through obligations with such partnerships. 
Additionally, the Company's investments in leveraged leases
have been partially financed through notes payable to banks. 
Of the amount of first mortgage bonds, notes payable, and
partnership obligations outstanding at December 31, 1993,
the following amounts mature in the five years subsequent to
1993:  1994 - $4,612,000; 1995 - $11,143,000; 1996 -
$12,394,000; 1997 - $2,672,000; and 1998 - $16,577,000.
    In addition, $41,475,000 of adjustable rate pollution
control series first mortgage bonds could, at the election
of the bondholder, be tendered to the Company in 1994 on
certain interest payment dates.  If the Company's agent is
 36
unable to remarket any bonds tendered at that time, the
Company would be required to obtain additional funds for
payment to bondholders.  For financial statement
presentation purposes those bonds subject to tender in 1994
are shown as current liabilities.
    First mortgage bonds, notes payable, and partnership
obligations outstanding and classified as long-term at
December 31 are as follows:

                                               1993       1992  
                                                     (in thousands)
                                                          
First Mortgage Bonds due:
    1995, 4-3/4%                                     $  5,000   $  5,000
    1996, 6%                                            8,000      8,000
    1998, 6-3/8%                                       12,000     12,000
    1999, 6%                                           45,000          -
    2001, 8%                                                -      7,500
    2002, 8%                                                -     12,000
    2003, 5.60% Pollution Control Series A              5,240      5,340
    2007, 8.35%                                             -     30,000
    2008, 6.05% Pollution Control Series A             22,000     22,000
    2014, 7.25% Pollution Control Series A             22,500     22,500
    2016, 8-7/8%                                       25,000     25,000
    2016, 9-1/4%                                            -     15,000
    2017, 8-5/8%                                            -     20,000
    2023, 7.60%                                        45,000          -
    2025, 7-5/8%                                       20,000          -
    Adjustable Rate Pollution Control:
        2015, Series A, presently 5.75%                     -      9,975
    Adjustable Rate Environmental Improvement:
        2023, Series B, presently 6%                   22,800          -
        2028, Series A, presently 4.65%                22,200          -
                                                     $254,740   $194,315
Notes Payable:
    Banks, due 1995 through 1998, presently 6% to 8% $  6,263   $  4,456
    Tax Exempt, due 2003, 6.25%                         1,000      1,000
                                                     $  7,263   $  5,456
Partnership Obligations, due 1995 through 2001,
 without interest                                    $ 12,881   $ 13,255


6. CUMULATIVE PREFERRED STOCK

    The amount payable in the event of involuntary
liquidation of each series of the $100 par value preferred
stock is $100 per share, plus accrued dividends.
    The nonredeemable preferred stock is callable at the
option of the Company as follows:
         4.8% Series at $110 per share, plus accrued
            dividends; and
         4.75% Series at $101 per share, plus accrued
            dividends.

7. CUMULATIVE REDEEMABLE PREFERRED STOCK

    On December 8, 1992, the Company issued $7,500,000 of
its Cumulative Redeemable Preferred Stock to replace a like
amount of 8.75% of Cumulative Preferred Stock.  The new
series has an interest rate of 6.50% and is redeemable at
$100 per share on December 1, 2002.  In the event of
involuntary liquidation of this series of $100 par value
preferred stock, the amount payable is $100 per share, plus
accrued dividends.

8. CUMULATIVE SPECIAL PREFERRED STOCK

    The Cumulative Special Preferred Stock contains a
provision which allows the stock to be tendered on any of
its dividend payment dates. On April 1, 1992, the Company
repurchased 850 shares of the Cumulative Special Preferred
Stock at a cost of $85,000 as a result of a tender within
the provision of the issuance.  On March 8, 1991, the
Company repurchased 100 shares at a cost of $10,000 as a
result of the same provision.

 37
9. COMMITMENTS AND CONTINGENCIES

    The Company presently estimates that approximately
$90,000,000 will be expended for construction purposes in
1994, including those amounts applicable to the Company's
Clean Air Act Compliance Plan and demand side management
(DSM) programs.  Commitments for the 1994 construction
program are approximately $44,000,000 at December 31, 1993. 
Reference is made to "Clean Air Act" and "Demand Side
Management" in Management's Discussion and Analysis of
Operations and Financial Condition for discussion of the
impact of the Federal Clean Air Act and implementation of
the Company's DSM programs.
    The Company is currently investigating the possible
existence of facilities once owned and operated by the
Company, its predecessors, previous landowners, or former
affiliates of the Company utilized for the manufacture of
gas.  Based on its investigations, the Company has
identified the existence and general location of four sites
at which contamination may be present.  The Company is
attempting to identify all potentially responsible parties
for each site.  The Company has not been named a potentially
responsible party by the Environmental Protection Agency for
any of these sites.
    While the Company intends to seek recovery from other
responsible parties or insurance carriers, the Company does
not presently anticipate seeking recovery of these
investigation costs from its ratepayers.  Therefore, the
Company has expensed the $500,000 anticipated cost of
performing preliminary  and comprehensive specific site
investigations of all four sites.  If the specific site
investigations indicate that significant remedial action is
required, the Company will seek recovery of all related
costs in excess of amounts recovered from other potentially
responsible parties or insurance carriers through rates.
    Although the IURC has not yet ruled on a pending
request for rate recovery by another Indiana utility of such
environmental costs, the IURC did grant that utility
authority to utilize deferred accounting for such costs
until the IURC rules on the request.

10. COMMON STOCK

    Since 1986, the Board of Directors of the Company
authorized the repurchase of up to $25,000,000 of the
Corporation's common stock. As of December 31, 1993, the
Company had accumulated 1,110,177 common shares with an
associated cost of $24,540,000 under this plan.  

    On January 21, 1992, the Board of Directors of the
Company approved a four-for-three common stock split
effective March 30, 1992.  The stock split was authorized by
the IURC on March 18, 1992.  Average common shares
outstanding, earnings per share of common stock and
dividends per share of common stock as shown in the
accompanying financial statements have been adjusted to
reflect the split.  Shares issued during 1992 as a result of
the stock split were 3,923,706.  No shares of common stock
were issued during 1993 and 1991. 
    Each outstanding share of the Company's stock contains
a right which entitles registered holders to purchase from
the Company one one-hundredth of a share of a new series of
the Company's Redeemable Preferred Stock, no par value,
designated as Series 1986 Preferred Stock, at an initial
price of $120.00 (Purchase Price) subject to adjustment. 
The rights will not be exercisable until a party acquires
beneficial ownership of 20% of the Company's common shares
or makes a tender offer for at least 30% of its common
shares.  The rights expire October 15, 1996.  If not
exercisable, the rights in whole may be redeemed by the
Company at a price of $.01 per right at any time prior to
their expiration.  If at any time after the rights become
exercisable and are not redeemed and the Company is involved
in a merger or other business combination transaction,
proper provision shall be made to entitle a holder of a
right to buy common stock of the acquiring company having a
value of two times such Purchase Price.

11. OWNERSHIP OF WARRICK UNIT 4

    The Company and Alcoa Generating Corporation (AGC), a
subsidiary of Aluminum Company of America, own the 270 MW
Unit 4 at the Warrick Power Plant as tenants in common. 
Construction of the unit was completed in 1970.  The cost of
constructing this unit was shared equally by AGC and the
Company, with each providing its own financing for its share
of the cost.  The Company's share of the cost of this unit
at December 31, 1993 is $30,733,000 with accumulated
depreciation totaling $17,846,000.  AGC and the Company also
share equally in the cost of operation and output of the
unit.  The Company's share of operating costs is included in
operating expenses in the Consolidated Statements of Income.

 38
12. SEGMENTS OF BUSINESS

    The Company is primarily a public utility operating
company engaged in distributing electricity and natural gas. 

The reportable items for electric and gas departments for
the years ended December 31 are as follows:

                                    1993      1992       1991 
                                           (in thousands)
                                                       
OPERATING INFORMATION-
  Operating revenues:
    Electric                               $258,405  $243,077   $263,887 
    Gas                                      70,116    62,870     58,695 
      Total                                 328,521   305,947    322,582 
  Operating expenses, excluding
   provision for income taxes:
    Electric                                188,875   176,371    193,200 
    Gas                                      69,679    62,167     56,829 
      Total                                 258,554   238,538    250,029 
  Pre-tax operating income:
    Electric                                 69,530    66,706     70,687 
    Gas                                         437       703      1,866 
      Total                                  69,967    67,409     72,553 
  Allowance for funds used during
   construction                               4,517     1,422      1,467 
  Other income, net                           1,729     1,220      2,611 
  Interest charges                          (19,956)  (18,675)   (19,697)
  Provision for income taxes                (16,604)  (14,609)   (18,421)
  Net income per accompanying
   Consolidated Statements of Income       $ 39,653  $ 36,767   $ 38,513 

OTHER INFORMATION -
  Depreciation and amortization expense:
    Electric                               $ 33,481  $ 32,786   $ 33,579 
    Gas                                       3,458     3,427      3,216 
      Total                                $ 36,939  $ 36,213   $ 36,795 
  Capital expenditures:
    Electric                           $ 74,182  $ 44,387   $ 28,967 
    Gas                                       5,927     7,723      7,702 
      Total                                $ 80,109  $ 52,110   $ 36,669 

INVESTMENT INFORMATION -
  Identifiable assets:
    Electric                               $679,044  $596,836   $577,014 
    Gas                                      87,632    84,752     85,277 
      Total                                $766,676  $681,588   $662,291 
  Nonutility plant and other investments     67,944    62,318     62,263 
  Assets utilized for overall Company
   operations                                25,403    17,375     22,891 
      Total assets                         $860,023  $761,281   $747,445

(a) Includes $4,530,000, $1,920,000, and $962,000  of demand side
management program expenditures for 1993, 1992, and 1991, respectively.
(b) Utility plant less accumulated provision for depreciation,
inventories, receivables (less allowance), and other identifiable assets.


 39
13.  TAXES OTHER THAN INCOME TAXES

    The items comprising property and other taxes for the
years ended December 31 are as follows:

                                    1993      1992       1991
                                           (in thousands)
                                                       
Real estate and personal property          $ 7,168   $ 8,479    $ 6,480
Indiana gross income                         4,078     3,686      3,901
Social security and unemployment             1,707     1,591      1,571
Other                                          494       454        486
Property and other taxes as shown on
 Consolidated Statements of Income          13,447    14,210     12,438
Property and other taxes included
 in Other Income                                44        42         40
Total property and other taxes             $13,491   $14,252    $12,478


14.  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

    The following methods and assumptions were used to
estimate the fair value of each class of financial
instruments for which it is practicable to estimate that
value:

    CASH AND TEMPORARY INVESTMENTS

    The carrying amount approximates fair value because of
the short maturity of those investments.  The fair value of
temporary investments were based on current market values.

    LONG-TERM DEBT

    The fair value of the Company's long-term debt was
estimated based on the current quoted market rate of
utilities with a comparable debt rating.  Nonutility long-
term debt was valued based upon the most recent debt
financing.

    PARTNERSHIP OBLIGATIONS

    The fair value of the Company's partnership obligations
was estimated based on the current quoted market rate of
comparable debt.

    REDEEMABLE PREFERRED STOCK

    Fair value of the Company's redeemable preferred stock
was estimated based on the current quoted market of
utilities with a comparable debt rating.
    The carrying amount and estimated fair values of the
Company's financial instruments at December 31 are as
follows:

                               1993                1992
    Carrying                     Estimated           Carrying  Estimated
    Amount                       Fair ValueAmount    Fair Value
                                 (in thousands)      (in thousands)
                                                   
Cash and Temporary Investments   $ 21,045 $ 21,268   $ 10,316  $ 10,346
Long-Term Debt (including
 current portion)                 304,241  323,776    252,130   263,549
Partnership Obligations            16,730   14,447     16,114    13,200
Redeemable Preferred Stock          7,500    7,135      7,500     7,500


    At December 31, 1993 and 1992, approximately
$19,100,000 and $11,200,000, respectively, represent the
excess of fair value over carrying amounts of the Company's
long-term debt relating to utility operations.  Anticipated
regulatory treatment of the excess of fair value over
carrying amounts of the Company's long-term debt, if in fact
settled at amounts approximating those above, would dictate
that these amounts be used to reduce the Company's rates
over a prescribed amortization period.  Accordingly, any
settlement would not result in a material impact on the
Company's financial position or results of operations.

 40

SELECTED QUARTERLY FINANCIAL DATA

(Unaudited)                      Quarters Ended
             March 31,       June 30,       September 30,    December 31,
           1993    1992    1993     1992    1993    1992     1993    1992
                        (in thousands except per share data)
                                             
Operating Revenues
           $93,236 $84,737 $75,941  $70,839 $82,778 $74,815  $76,566 $75,556

Operating Income
           $16,169 $15,185 $12,668  $13,798 $17,495 $14,957  $ 5,310 $ 6,979

Net Income
           $12,733 $11,334 $ 9,188  $10,402 $14,819 $11,458  $ 2,913 $ 3,573

Earnings Per Share of Common Stock
           $  0.79 $  0.70 $  0.57  $  0.64 $  0.93 $  0.71  $  0.17 $  0.21

Average Common Shares Outstanding
            15,705  15,705  15,705   15,705  15,705  15,705   15,705  15,705

     Information for any one quarterly period is not
indicative of the annual results which may be expected due
to seasonal variations common in the utility industry.
     The quarterly earnings per share may not add to the
total earnings per share for the year due to rounding.


Item 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL       
          DISCLOSURE

       None


                            PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE         
          REGISTRANT

       (a)   Identification of Directors

             The information required by this item is     
   			 included in the Company's Proxy Statement,
       definitive copies of which were filed with the
       Commission pursuant to Regulation 14A.

       (b)   Identification of Executive Officers

             The information required by this item is     
       included in Part I, Item 1. - BUSINESS on page 9, to
       which reference is hereby made.

Item 11.  EXECUTIVE COMPENSATION AND TRANSACTIONS

          The information required by this item is included
       in the Company's Proxy Statement, definitive copies
       of which were filed with the Commission pursuant to
       Regulation 14A.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT

          The information required by this item is included
       in the Company's Proxy Statement, definitive copies
       of which were filed with the Commission pursuant to
       Regulation 14A.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The information required by this item is included
       in the Company's Proxy Statement, definitive copies
       of which were filed with the Commission pursuant to
       Regulation 14A.



 41
                             PART IV

Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND    
       REPORTS ON FORM 8-K

(a)  1)    The financial statements, including supporting
           schedules, are listed in the Index to Financial
           Statements, page 22,
(a)  2)    filed as part of this report.
 
(a)  3)    Exhibits:

  EX-2(a)  Merger Agreement - Plan of Reorganization
           and Agreement of Merger, by and among:  Southern
           Indiana Gas and Electric Company; Southern
           Indiana Group, Inc.; Horizon Investments,
           Inc.; and MPM Investment Corporation, dated
           August 27, 1987.  (Physically filed and
           designated as Exhibit A in Form S-4
           Registration Statement filed November 12, 1987,
           File No. 33-18475.)

  EX-3(a)  Amended Articles of Incorporation as amended
           March 26, 1985.  (Physically filed and
           designated in Form 10-K, for the fiscal year
           1985, File No. 1-3553, as Exhibit 3-A.) 
           Articles of Amendment of the Amended Articles
           of Incorporation, dated March 24, 1987. 
           (Physically filed and designated in Form 10-K
           for the fiscal year 1987, File No. 1-3553, as
           Exhibit 3-A.)  Articles of Amendment of the
           Amended Articles of Incorporation, dated
           November 27, 1992.  (Physically filed and
           designated in Form 10-K for the fiscal year
           1992,  File No. 1-3553, as Exhibit 3-A).

  EX-3(b)  By-Laws as amended through December 18, 1990. 
           (Physically filed in Form 10-K for the fiscal
           year 1990, File No. 1-3553, as Exhibit 3-B.) 
           By-Laws as amended through September 22, 1993. 
           (Physically filed herewith as EX-3(b).)

  EX-4(a)*Mortgage and Deed of Trust dated as of April 1,
           1932 between the Company and Bankers Trust
           Company, as Trustee, and Supplemental
           Indentures thereto dated August 31, 1936,
           October 1, 1937, March 22, 1939, July 1, 1948,
           June 1, 1949, October 1, 1949, January 1,
           1951, April 1, 1954, March 1, 1957, October 1, 
           1965, September 1, 1966, August 1, 1968, May
           1, 1970, August 1, 1971, April 1, 1972,
           October 1, 1973, April 1, 1975, January 15,
           1977, April 1, 1978, June 4, 1981, January 20,
           1983, November 1, 1983, March 1, 1984, June 1,
           1984, November 1, 1984, July 1, 1985, November
           1, 1985, June 1, 1986.  (Physically filed and
           designated in Registration No. 2-2536 as
           Exhibits B-1 and B-2; in Post-effective
           Amendment No. 1 to Registration No. 2-62032 as
           Exhibit (b)(4)(ii), in Registration No. 
           2-88923 as Exhibit 4(b)(2), in Form 8-K, File
           No. 1-3553, dated June 1, 1984 as Exhibit (4),
           File No. 1-3553, dated March 24, 1986 as
           Exhibit 4-A, in Form 8-K, File No. 1-3553,
           dated June 3, 1986 as Exhibit (4).)  July 1,
           1985 and November 1, 1985 (Physically filed
           and designated in Form 10-K, for the fiscal
           year 1985, File No. 1-3553, as Exhibit 4-A.) 
           November 15, 1986 and January 15, 1987. 
           (Physically filed and designated in Form 10-K,
           for the fiscal year 1986, File No. 1-3553, as
           Exhibit 4-A.)  December 15, 1987.  (Physically
           filed and designated in Form 10-K, for the
           fiscal year 1987, File No. 1-3553, as Exhibit
           4-A.)  December 13, 1990.  (Physically filed
           and designated in Form 10-K, for the fiscal
           year 1990, File No. 1-3553, as Exhibit 4-A.) 
           April 1, 1993.  (Physically filed and
           designated in Form 8-K, dated April 13, 1993,
           File 1-3553, as Exhibit 4.)  June 1, 1993
           (Physically filed and designated in Form 8-K,
           dated June 14, 1993, File 1-3553, as Exhibit
           4.)  May 1, 1993.  (Physically filed herewith
           as EX-4(a).)

  EX-10.1  Agreement, dated, January 30, 1968, for Unit
           
           No. 4 at the Warrick Power Plant of Alcoa
           Generating Corporation ("Alcoa"), between
           Alcoa and the Company.  (Physically filed and
           designated in Registration No. 2-29653 as
           Exhibit 4(d)-A.)

  EX-10.2  Letter of Agreement, dated June 1, 1971, and
           Letter Agreement, dated June 26, 1969, between
           Alcoa and the Company.  (Physically filed and
           designated in Registration No. 2-41209 as
           Exhibit 4(e)-2.)


*Pursuant to paragraph (b)(4)(iii)(a) of Item 601 of
Regulation S-K, the Company agrees to furnish to the
Commission on request any instrument with respect to long-
term debt if the total amount of securities authorized
thereunder does not exceed 10% of the total assets of the
Company, and has therefore not filed such documents as
exhibits to this Form 10-K.

 42
Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
           REPORTS ON FORM 8-K  (Continued)

    EX-10.3    Letter Agreement, dated April 9, 1973, and
               agreement dated April 30, 1973, between
               Alcoa and the Company.  (Physically filed
               and designated in Registration No. 2-53005
               as Exhibit 4(e)-4.)

    EX-10.4    Electric Power Agreement (the "Power
               Agreement"), dated May 28, 1971, between
               Alcoa and the Company.  (Physically filed
               and designated in Registration No. 2-41209
               as Exhibit 4(e)-1.)

    EX-10.5    Second Supplement, dated as of July 10,
               1975, to the Power Agreement and Letter
               Agreement dated April 30, 1973 - First
               Supplement. (Physically filed and designated
               in Form 12-K for the fiscal year 1975, File
               No. 1-3553, as Exhibit 1(e).)

    EX-10.6    Third Supplement, dated as of May 26, 1978,
               to the Power Agreement.  (Physically filed
               and designated in Form 10-K for the fiscal
               year 1978 as Exhibit A-1.)

    EX-10.7    Letter Agreement dated August 22, 1978
               between the Company and Alcoa, which amends
               Agreement for Sale in an Emergency of
               Electrical Power and Energy Generation by
               Alcoa and the Company dated June 26, 1979. 
               (Physically filed and designated in Form
               10-K for the fiscal year 1978, File No. 1-
               3553, as Exhibit A-2.)

    EX-10.8    Fifth Supplement, dated as of December 13,
               1978, to the Power Agreement.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1979, File No. 1-3553, as
               Exhibit A-3.)

    EX-10.9    Sixth Supplement, dated as of July 1, 1979,
               to the Power Agreement.  (Physically filed
               and designated in Form 10-K for the fiscal
               year 1979, File No. 1-3553, as Exhibit A-5.)

    EX-10.10   Seventh Supplement, dated as of October 1,
               1979, to the Power Agreement.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1979, File No. 1-3553, as
               Exhibit A-6.)

    EX-10.11   Eighth Supplement, dated as of June 1, 1980
               to the Electric Power Agreement, dated May
               28, 1971, between Alcoa and the Company. 
               (Physically filed and designated in Form 10-
               K for the fiscal year 1980, File No. 1-3553,
               as Exhibit (20)-1.)

    EX-10.12*  Agreement dated May 6, 1991 between the
               Company and Ronald G. Reherman for
               consulting services and supplemental pension
               and disability benefits.  (Physically filed
               and designated in Form 10-K for the fiscal
               year 1992, File No. 1-3553, as Exhibit 10-A-
               12.)

    EX-10.13*  Agreement dated July 22, 1986 between the
               Company and A. E. Goebel regarding
               continuation of employment.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1992, File No. 1-3553, as
               Exhibit 10-A-13.)

    EX-10.14*  Agreement dated July 25, 1986 between the
               Company and Ronald G. Reherman regarding
               continuation of employment.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1992, File No. 1-3553, as
               Exhibit 10-A-14.)

    EX-10.15*  Agreement dated July 22, 1986 between the
               Company and James A. Van Meter regarding
               continuation of employment.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1992, File No. 1-3553, as
               Exhibit 10-A-15.)

    EX-10.16*  Agreement dated February 22, 1989 between
               the Company and J. Gordon Hurst regarding
               continuation of employment.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1992, File No. 1-3553 as Exhibit
               10-A-16.)
    
    EX-10.17*  Summary description of the Company's
               nonqualified Supplemental Retirement Plan
               (Physically filed and designated in Form 10-
               K for the fiscal year 1992, File No. 1-3553,
               as Exhibit 10-A-17.)


    * Filed pursuant to paragraph (b)(10)(iii)(A) of Item
601 of Regulation S-K.

 43
Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K  (Continued)

    EX-10.18*  Supplemental Post Retirement Death Benefits
               Plan, dated October 10, 1984.  (Physically
               filed and designated in Form 10-K for the
               fiscal year 1992, File No. 1-3553, as
               Exhibit 10-A-18.)

    EX-10.19*  Summary description of the Company's
               Corporate Performance Incentive Plan. 
               (Physically filed and designated in Form 10-
               K for the fiscal year 1992, File No. 1-3553,
               as Exhibit 10-A-19.)

    EX-10.20*  Company's Corporate Performance Incentive
               Plan as amended for the plan year beginning
               January 1, 1994.  (Physically filed herewith
               as Exhibit 10-A-20.)

    * Filed pursuant to paragraph (b)(10)(iii)(A) of Item
    601 of Regulation S-K.


                                                       
(b)   Reports on Form 8-K

          No Form 8-K reports were filed by the Company
          during the fourth quarter of 1993.

 44 
SCHEDULE V
Page 1 of 3
                 SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                       PROPERTY, PLANT AND EQUIPMENT
                               Year 1993


Column A           Column B  Column C   Column D     Column E Column F

                                        Retirements
                   Balance   Additions  or Sales at  Other    Balance
Classification     Jan. 1,    At Cost   Orig. Cost   Changes  Dec. 31,
                    1993                                        1993
                                        (in thousands)
ELECTRIC PLANT:
                                                    
  Production:
    Steam          $519,788  $ 5,403    $  540       $   5    $  524,656 
    Other            43,870        -         -           -        43,870 
  Transmission       94,610    2,555       215         (91)       96,859 
  Distribution      167,115    8,174     1,212          95       174,172 
  General             9,966      667       418         764)        9,451 

  Total
   Electric Plant  $853,349  $16,799    $2,385       $(755)   $  849,008


GAS PLANT:

  Gas Prod. &
    Gathering      $     54  $     -    $    -       $   -    $       54
  Underground
    Storage           7,933      245         -           -         8,178 
  Transmission       11,854      229        58          34        12,059 
  Distribution       73,103    4,482       560         (34)       76,991 
  General             4,383      455       129        (693)        4,016 

  Total Gas Plant  $ 97,327  $ 5,411    $  747       $(693)   $  101,298

COMMON PLANT:      $ 36,324  $   416    $1,922       $1,452   $   36,270 

  Plant in
    Service        $969,000  $22,626    $5,054       $    4   $  986,576 

CONSTRUCTION WORK
  IN PROGRESS      $ 19,668  $52,947    $    -       $    -   $   72,615 

  Total Utility
    Plant          $988,668  $75,573    $5,054       $    4   $1,059,191 

(a)Amounts do not agree with balance sheet totals as
common plant is allocated between electric and gas plant for
financial statement purposes.

NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1993 were: 
Electric - 3.9%; Gas 3.6%; and Common - 6.1%.
/TABLE

 44 
SCHEDULE V
Page 2 of 3
            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                  PROPERTY, PLANT AND EQUIPMENT
                            Year 1992


Column A           Column B  Column C   Column D     Column E Column F

                                        Retirements
                   Balance   Additions  or Sales at  Other     Balance
Classification     Jan. 1,    At Cost   Orig. Cost   Changes   Dec. 31,
                    1992                                         1992
                                   (in thousands) 
                                               
ELECTRIC PLANT:

  Production:
  Steam            $516,533  $ 4,068    $  481       $ (332)  $519,788 
  Other              44,274     (404)        -            -     43,870 
  Transmission       88,390    6,850       598          (32)    94,610 
  Distribution      160,631    8,021     1,501          (36)   167,115 
  General             9,391      841       266            -      9,966 

  Total Electric
    Plant          $819,219  $19,376    $2,846       $ (400)  $835,349 

GAS PLANT:

  Gas Prod. &
    Gathering      $     54  $     -    $    -       $    -   $     54 
  Underground
    Storage           7,642      291         -            -      7,933 
  Transmission       10,608    1,258        12            -     11,854 
  Distribution       69,273    4,479       641           (8)    73,103 
  General             4,129      464       210            -      4,383 

  Total Gas Plant  $ 91,706  $ 6,492    $  863       $   (8)  $ 97,327 

COMMON PLANT:      $ 22,183  $14,444    $  303       $    -   $ 36,324 

  Plant in
    Service        $933,108  $40,312    $4,012       $(408)   $969,000 

CONSTRUCTION WORK
  IN PROGRESS      $  9,792  $ 9,876    $    -       $   -    $ 19,668 

  Total Utility
    Plant          $942,900  $50,188    $4,012       $(408)   $988,668 

(a)Amounts do not agree with balance sheet totals as
 common plant is allocated between electric and gas plant
 for financial statement purposes.

NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1992 were: 
Electric - 3.9%; Gas 3.8%; and Common - 6.5%
/TABLE

 46 
SCHEDULE V
Page 3 of 3
            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
                  PROPERTY, PLANT AND EQUIPMENT
                            Year 1991


Column A           Column B  Column C   Column D     Column E Column F

                                        Retirements
                   Balance   Additions  or Sales at    Other   Balance
Classification     Jan. 1,    At Cost   Orig. Cost    Changes  Dec. 31,
                    1991                                         1991
                                   (in thousands)                  
                                               
ELECTRIC PLANT:

  Production:
  Steam            $510,413  $  7,331   $1,211       $    -   $516,533 
  Other              18,183    26,145       54            -     44,274 
  Transmission       87,014     1,698      323            1     88,390 
  Distribution      154,844     7,001    1,228           14    160,631 
  General             8,733       906      253            5      9,391 

  Total Electric
    Plant          $779,187  $ 43,081   $3,069       $   20   $819,219

GAS PLANT:

  Gas Prod. &
    Gathering      $     54  $      -   $    -       $    -   $     54 
  Underground 
    Storage           7,355       358       71            -      7,642 
  Transmission       10,364       249        5            -     10,608 
  Distribution       64,852     4,880      459            -     69,273 
  General             3,651       645      167            -      4,129 

  Total Gas Plant  $ 86,276  $  6,132   $  702       $    -   $ 91,706

COMMON PLANT:      $ 19,740  $  2,803   $  360       $    -   $ 22,183 

  Plant in
    Service        $885,203  $ 52,016   $4,131       $   20   $933,108 

CONSTRUCTION WORK
  IN PROGRESS      $ 26,064  $(16,272)  $    -       $    -   $  9,792 

  Total Utility
    Plant          $911,267  $ 35,744   $4,131       $   20   $942,900 

Amounts do not agree with balance sheet totals as common
plant is allocated between electric and gas plant for
financial statement purposes.

NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1991 were: 
Electric - 3.9%; Gas 3.8%; and Common - 8.2%.
/TABLE

 47
SCHEDULE VI
Page 1 of 3

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

   ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF
                  PROPERTY, PLANT AND EQUIPMENT

                            Year 1993


Column A           Column B  Column C   Column D     Column E Column F
                             Additions
                             Charged to
                   Balance   Costs and      Net       Other    Balance
Classification     Jan. 1,   Expenses   Retirements  Changes   Dec. 31,
                    1993                                        1993
                                    (in thousands)    
                                               
ELECTRIC PLANT:

  Production:
  Steam            $216,349  $20,197    $  653       $   -    $235,893 
  Other              16,131    2,188         -           -      18,319 
  Transmission       45,194    3,533       304           -      48,423 
  Distribution       61,537    5,796     1,393           -      65,940 
  General             6,676      851       368        (349)      6,810 

  Total Electric
    Plant          $345,887  $32,565    $2,718       $(349)   $375,385 

GAS PLANT:

  Gas Prod. &
    Gathering      $     23  $     1    $    -       $   -    $     24 
  Underground
    Storage           2,275       91         -           -       2,366 
  Transmission        5,223      381         -           -       5,604 
  Distribution       29,180    2,602       691           -      31,091 
  General             2,095      278        93        (186)      2,094 

  Total Gas Plant  $ 38,796  $ 3,353    $  784       $(186)   $ 41,179 

COMMON PLANT:      $  6,858  $ 2,037    $2,264       $ 535    $  7,166 


  Total Utility
    Plant          $391,541  $37,955    $5,766       $   -    $423,730 


NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1993 were: 
Electric - 3.9%; Gas 3.6%; and Common - 6.1%.
/TABLE

 48
SCHEDULE VI
Page 2 of 3

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

   ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF
                  PROPERTY, PLANT AND EQUIPMENT

                            Year 1992


Column A           Column B  Column C   Column D     Column E Column F
                             Additions
                             Charged to
                   Balance   Costs and      Net       Other    Balance
Classification     Jan. 1,    Expenses  Retirements  Changes   Dec. 31,
                    1992                                        1992
                                   (in thousands)                  
                                               
ELECTRIC PLANT:

  Production:
  Steam            $196,788  $20,053    $  492       $   -    $216,349 
  Other              14,039    2,092         -           -      16,131 
  Transmission       42,601    3,377       784           -      45,194 
  Distribution       57,519    5,566     1,548           -      61,537 
  General             6,101      812       229          (8)      6,676 

  Total Electric
    Plant          $317,048  $31,900    $3,053       $  (8)   $345,887 

GAS PLANT:

  Gas Prod. &
    Gathering      $     21  $     2    $    -       $   -    $     23 
  Underground
    Storage           2,212       63         -           -       2,275 
  Transmission        4,860      375        12           -       5,223 
  Distribution       27,224    2,654       698           -      29,180 
  General             1,985      301       169         (22)      2,095 

  Total Gas Plant  $ 36,302  $ 3,395    $  879       $ (22)   $ 38,796 

COMMON PLANT:      $  5,583  $ 1,703    $  458       $  30    $  6,858 


  Total Utility
    Plant          $358,933  $36,998    $4,390       $   -    $391,541


NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1992 were: 
Electric - 3.9%; Gas 3.8%; and Common - 6.5%.

 49
SCHEDULE VI
Page 3 of 3

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

   ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF
                  PROPERTY, PLANT AND EQUIPMENT

                            Year 1991




Column A           Column B  Column C   Column D     Column E Column F
                             Additions
                             Charged to
                   Balance   Costs and     Net        Other    Balance
Classification     Jan. 1,    Expenses  Retirements  Changes  Dec. 31,
                    1991                                        1991
                                        (in thousands)                  
                                               
ELECTRIC PLANT:

  Production:
  Steam            $178,501  $19,880    $1,593       $   -    $196,788 
  Other              12,283    1,756         -           -      14,039 
  Transmission       39,722    3,226       347           -      42,601 
  Distribution       53,430    5,363     1,274           -      57,519 
  General             5,560      750       220          11       6,101 

  Total Electric
    Plant          $289,496  $30,975    $3,434       $  11    $317,048 

GAS PLANT:

  Gas Prod. &
    Gathering      $     20  $     1    $    -       $   -    $     21 
  Underground
    Storage           2,205       83        76           -       2,212 
  Transmission        4,509      356         5           -       4,860 
  Distribution       25,338    2,500       614           -      27,224 
  General             1,847      263       136          11       1,985 

  Total Gas Plant  $ 33,919  $ 3,203    $  831       $  11    $ 36,302 

COMMON PLANT:      $  4,450  $ 1,480    $  325       $ (22)   $  5,583 


  Total Utility
    Plant          $327,865  $35,658    $4,590       $   -    $358,933 

 
NOTE:Depreciation of utility plant is computed using the
straight-line method over the estimated lives of depreciable
plant.  The average depreciation rates for 1991 were: 
Electric - 3.9%; Gas 3.8%; and Common - 8.2%.
/TABLE

 50
SCHEDULE VIII

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

         VALUATION AND QUALIFYING ACCOUNTS AND RESERVES



Column A            Column B        Column C         Column D     Column E
                                    Additions
                    Balance     Charged    Charged   Deductions   Balance
                    Beginning   to         to Other  from Re-     End of 
Description         of Year     Expenses   Accounts  serves, Net   Year
                                      (in thousands)                  
                                                   
VALUATION AND QUALIFYING
  ACCOUNTS:

Year 1993 - Accumulated
  provision for uncollectible
  accounts          $  136      $  616     $     -   $  586       $  166

Year 1992 - Accumulated
  provision for uncollectible
  accounts          $  260      $  330     $     -   $  454       $  136

Year 1991 - Accumulated
  provision for uncollectible
  accounts          $  605      $  777     $     -   $1,122       $  260



OTHER RESERVES:

Year 1993 - Reserve for
  injuries and
   damages          $  334      $1,177     $  97 $  287       $1,321

Year 1992 - Reserve for
  injuries and
   damages          $  626      $   58     $  58 $  408       $  334

Year 1991 - Reserve for
  injuries and
   damages          $1,086      $   89     $ 122 $  671       $  626


 Charged to construction accounts


 51
SCHEDULE IX

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                      SHORT-TERM BORROWINGS


     Reference is made to Note 4 of the Notes to
Consolidated Financial Statements, page 35, regarding short-
term borrowings.







 52
SCHEDULE X


            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

           SUPPLEMENTARY INCOME STATEMENT INFORMATION



     Reference is made to Note 13 of the Notes to
Consolidated Financial Statements, page 39, regarding taxes
other than income taxes.

     Maintenance and depreciation, other than set forth in
the "Consolidated Statements of Income," rents, advertising
costs, research and development and royalties during the
periods were not significant.

 53
SCHEDULE XIII

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                        OTHER INVESTMENTS
                        December 31, 1993



Column A                                   Column B       Column C   

                                           Cost of Each   Amount Carried 
Type of Investment                         Investment     on Balance Sheet
                                                    (in thousands)           
                                                      
Leveraged Leases

     JVA 1 - Paper Mill                    $ 7,219       $ 8,632    

     JVA 2 - Reservoir                      10,069        13,895    

     MCN Equities - Office Building          6,882         9,501    

     Dutch Rail Equipment                    2,769         2,896    

Total Leveraged Leases                      26,939        34,924    

Limited Partnerships

     Low income housing projects            26,821        21,833    

     Other                                   2,735         3,190    

Total Limited Partnerships                  29,556        25,023    

Environmental improvement funds
 held by Trustee                            22,613        22,613    

Real estate and other                        8,794         7,997    

     Total other investments               $87,902       $90,557    



 56
                                    SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Date:  March 28, 1994      SOUTHERN INDIANA GAS AND
                     ELECTRIC COMPANY
              By R. G. Reherman, Chairman, President
                   and Chief Executive Officer


                   BY (R. G. Reherman)
                       R. G. Reherman

    Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signatures      Title                       Date

R. G. Reherman  Chairman, President, Chief
                 Executive Officer (Principal
                Executive Officer)          March 28, 1994

A. E. Goebel*   Senior Vice President, Chief Financial
                Officer, Secretary and Treasurer
                (Principal Financial
                 Officer)                   March 28, 1994

S. M. Kerney*   Controller (Principal
                 Accounting Officer)        March 28, 1994

Melvin H. Dodson*    )
                     )
Walter B. Emge*      )
                     )
Robert L. Koch II*   )
                     )
Jerry A. Lamb*       )
                     )
Donald A. Rausch*    )   Directors          March 28, 1994
                     )
John H. Schroeder*   )
                     )
Richard W. Shymanski*)
                     )
Donald E. Smith*     )
                     )
James S. Vinson*     )
                     )
N. P. Wagner*        )


*By
         (R. G. Reherman, Attorney-in-fact)


SIGECO
10-K



                          EXHIBIT INDEX


                                                Sequential  
                                                Page Number

Exhibits incorporated by reference are found on      42-44  
 

EX-3(b)   By-Laws as amended through
           September 22, 1993                        63-79

EX-4(a)   Supplemental Indentures dated May 1, 1993  81-108

EX-10.20  Company's Corporate Performance           
           Incentive Plan as amended for the
           plan year beginning January 1, 1994      110-114

EX-12     Computation of ratio of earnings to
           fixed charges                               55

EX-21     Subsidiary of the Registrant                 56

EX-24     Power-of-Attorney                          60-61



EX-3
2
EX-3(B)BY-LAWS


 63
                         BY-LAWS

           SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

             AS AMENDED THROUGH SEPTEMBER 22, 1993


ARTICLE I:  LOCATION OF OFFICES

     Section 1 - Principal Office:  The principal office of
     the corporation shall be at 20-24 N. W. Fourth Street,
     Evansville, Vanderburgh County, Indiana.

     Section 2 - Other Offices:  The corporation may have
     and maintain such other offices as the Board of
     Directors may deem expedient.

ARTICLE II:  CORPORATE SEAL

     The corporation shall have a corporate seal with the
     name of the corporation and the words "Evansville,
     Indiana" inscribed about a circle and the words
     "Incorporated, 1912" within such circle.

ARTICLE III:  FISCAL YEAR

     The fiscal year of the corporation shall begin on the
     first day of January and end on the thirty-first day of
     December of each year.

ARTICLE IV:  SHAREHOLDERS' MEETINGS

     Section 1 - Place of Meetings:  All meetings of the
     shareholders shall be held at the principal office of
     the corporation, except such meetings as the Board of
     Directors by resolution determine shall be held
     elsewhere, in which case meetings may be held upon
     notice, as hereinafter provided, at such place or
     places within or without the State of Indiana as the
     Board of Directors may determine.

     Section 2 - Annual Meeting:  The annual meeting of the
     shareholders shall be held at 3:00 o'clock P.M. on the
     fourth Tuesday of March in each year, or on such other
     date or time as may be fixed by the Board of Directors
     and stated in the notice of the meeting, provided such
     annual meeting shall be held in any event within five
     (5) months after the close of the fiscal year of the
     corporation for the election of Directors and the
     transaction of such other business as may properly come
     before the meeting.

     Section 3 - Special Meetings:  Except as otherwise
     required by law and subject to the rights of any class
     or series of stock having a preference over the common
     stock as to dividends or upon liquidation, a special
 64
     meeting of the shareholders of the corporation may be
     called by the Board of Directors, the Chairman of the
     Board or the Chief Executive Officer, or by the
     Secretary upon the request in writing of the holders of
     not less than seventy percent (70%) of the voting stock
     of the corporation.

     Section 4 - Notices:  At least ten (10) days before any
     meeting of shareholders written or printed notice
     stating the place, day and hour of the meeting and, in
     case of a special meeting or when required by law or by
     the Amended Articles of Incorporation, the purpose or
     purposes for which the meeting is called, shall be
     delivered or mailed by the Secretary or by the officers
     or persons calling the meeting to each shareholder of
     record entitled by law, these By-Laws or the Amended
     Articles of Incorporation to vote at such meeting, at
     such address as appears on the records of the
     corporation.  Notice of any shareholders' meeting may
     be waived in writing by any shareholder if the waiver
     sets forth in reasonable detail the purpose or purposes
     for which the meeting is called and the time and place
     thereof.  Attendance at any meeting in person or by
     proxy when the instrument of proxy sets forth in
     reasonable detail the purpose or purposes for which the
     meeting is called, shall constitute a waiver of notice
     of such meeting.  No notice of the holding of an
     adjourned meeting shall be necessary.  Each shareholder
     who has, in the manner above provided, waived notice of
     a shareholders' meeting or who personally attends a
     shareholders' meeting or is represented thereat by a
     proxy authorized to appear by an instrument of proxy
     complying with the requirements above set forth, shall
     be conclusively presumed to have been given due notice
     of such meeting.

     Section 5 - Quorum:  Subject to the provisions of the
     Amended Articles of Incorporation, at any meeting of
     the shareholders one-third (1/3) of the shares of the
     outstanding capital stock represented in person or by
     proxy shall constitute a quorum for the transaction of
     business, but a lesser number may convene and adjourn.

     Section 6 - Voting:  Shareholders entitled by law,
     these ByLaws or the Amended Articles of Incorporation
     to vote at any meeting of shareholders may vote either
     in person or by proxy executed in writing by the
     shareholder or a duly authorized attorney-in-fact.  No
     proxy shall be valid after eleven (11) months from the
     date of its execution unless a longer time is expressly
     provided therein. At all meetings of the shareholders
     the holder of each share of the preferred stock $100.00
     par value and of the common stock shall be entitled to
     one (1) vote for each share of such stock standing in
     his name on the books of the corporation and the holder
     of each share of the preferred stock, no par value,
     shall be entitled to a fraction of one (l) vote per
     share, which fraction shall be equal to the ratio of
 65
     the involuntary liquidation value of such share to
     $100.00, upon all questions; and a majority of the
     votes cast at any such meeting shall be sufficient for
     the adoption or rejection of any question presented
     unless otherwise provided by law or by the Amended
     Articles of Incorporation.  No shareholder shall have
     cumulative voting rights in connection with the
     election of Directors.

     No share shall be voted at any meeting:

     (1)  Upon which any installment is due and unpaid, or

     (2)  Which belongs to the corporation.

     For the purpose of determining shareholders entitled to
     vote at any meeting of the shareholders or any
     adjournment thereof or shareholders entitled to receive
     payment of any dividend or in order to make a
     determination of shareholders for any other purpose,
     only those shareholders who are shareholders of record
     on the record date fixed by the Board of Directors or
     as provided in Article XI, Section 2 hereof, shall be
     entitled to vote.  Any shareholder acquiring title to
     shares of stock after said record date shall, upon
     written request to the shareholder of record, be
     entitled to receive a proxy from such shareholder with
     power of substitution to vote such stock.

     Shares standing in the name of a corporation (other
     than Southern Indiana Gas and Electric Company) may be
     voted by such officers, agents or proxy as the Board of
     Directors of such corporation may appoint.  Shares held
     by fiduciaries may be voted by the fiduciaries in such
     manner as the instrument or order appointing such
     fiduciaries may direct.  In the absence of any such
     direction or the inability of the fiduciaries to act in
     accordance therewith, shares held jointly by three (3)
     or more fiduciaries shall be voted in accordance with
     the will of the majority.  Where the fiduciaries or a
     majority of them cannot agree or where they are equally
     divided upon the questions of voting such shares, any
     court of general equity jurisdiction may, upon petition
     filed by any of such fiduciaries or by any party in
     interest, direct the voting of such shares as it may
     deem for the best interests of the beneficiaries and
     such shares shall be voted in accordance with such
     direction.  Shares that are pledged may, unless
     otherwise provided in the agreement of pledge, be voted
     by the shareholder pledging the same until the shares
     have been transferred to the pledgee on the books of
     the corporation and thereafter they may be voted by the
     pledgee.

     Section 7 - Voting Lists:  At least five (5) days
     before each election of Directors, the officer or agent
     having charge of the stock transfer books shall make a
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     complete list of the shareholders, arranged in
     alphabetical order, with the address and number of
     shares and votes held by each, which list shall be on
     file at the principal office of the company and subject
     to inspection by any shareholder.  Such list shall be
     produced and kept open at the time and place of
     election and subject to the inspection of any
     shareholder during the holding of such election.  The
     original stock register or transfer books, or
     duplicates thereof kept in the State of Indiana, shall
     be the only evidence as to who are the shareholders
     entitled to examine such list or the stock ledger or
     transfer book or to vote at any meeting of the
     shareholders.

ARTICLE V:  DIRECTORS

     Section 1 - Number:  The Board of Directors of this
     corporation shall consist of eleven (11) members.

     Section 2 - Classes:  The Board of Directors shall be
     and is divided into three (3) Classes - Class I, Class
     II and Class III - which will be as nearly equal in
     number as possible.  No Class shall include less than
     three (3) Directors.

     Section 3 - Election:  At the annual meeting of
     shareholders during which the members of the Board of
     Directors are initially divided into the above
     described Classes by appropriate amendment of the
     Amended Articles of Incorporation of the corporation,
     those Directors who are assigned to Class I shall be
     elected for one-year terms, those assigned to Class II
     shall be elected for two-year terms and those assigned
     to Class III shall be elected for three-year terms.  At
     each succeeding annual meeting of the shareholders, an
     election of Directors of the corporation shall be held
     for the Class of Directors whose terms of office expire
     at such time.  In the event of a failure to hold an
     annual meeting of the shareholders or to conduct an
     election of Directors at any annual meeting of
     shareholders which-is held, the Directors to be elected
     at such meeting may be elected at any special meeting
     of the shareholders called for that purpose.  At any
     election of Directors, the Chairman of the Board, if
     presiding, or the Chief Executive Officer, if other
     than the Chairman of the Board, may appoint inspectors
     or judges who shall report to the meeting upon the
     validity of all proxies received, count the votes cast
     and make a report thereof at such meeting.

     Section 4 - Term of Office, Qualification and
     Retirement: 

     A.   With Respect to Each Director Elected Prior to
          July 23, 1985, except for each initial Director in
          Class I and Class II who shall serve for the
          respective terms designated in the preceding
          Section 3, each such Director shall serve for a
          term ending on the date of the third annual
          meeting of shareholders following the annual
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          meeting at which such Director was elected;
          provided, however, that any Director who arrives
          at the age of seventy-two (72) years subsequent to
          January 1, 1991, shall tender his resignation to
          become effective at the end of the calendar year
          prior to the year of expiration of the term during
          which the Director attains his seventy-second
          (72nd) birthday, and his successor shall be chosen
          in accordance with the provisions of Section 5 of
          this Article V.

     B.   With Respect to Each Director Elected After July
          22, 1985, each such Director shall serve for a
          term ending on the date of the third annual
          meeting of shareholders following the annual
          meeting at which such Director was elected;
          provided, however, that any such Director who
          arrives at the age of seventy (70) years during
          his elected term shall tender his resignation to
          become effective at the end of the calendar year
          during which he attains his seventieth (70th)
          birthday, and his successor shall be chosen in
          accordance with the provisions of Section 5 of
          this Article V.

     C.   By invitation of the Board of Directors, board
          members who have held the position of Chairman of
          the Board or Chief Executive Officer of the
          Company may, upon retirement from the Board of
          Directors, be elected, on an annual basis, to
          serve in the capacity of an advisory board member. 
          Advisory board members are entitled to receive the
          annual stipend portion of the regularly
          established directors compensation then in effect
          pursuant to Section 7 of this Article V; however,
          they shall not enjoy voting privileges. 
          Furthermore, advisory board members shall not
          receive regular committee assignments, but may,
          from time to time, be called for committee service
          for which they will be compensated at the
          established per meeting fee.

     Section 5 - Vacancies:  Each Director shall serve until
     his successor is elected and qualified or until his
     death, retirement, resignation or removal.  Should a
     vacancy occur or be created, whether arising through
     the death, resignation or removal of a Director or
     through an increase in the number of Directors, such
     vacancy shall be filled by a majority vote of the
     remaining Directors of all Classes of the Board of
     Directors or, at the discretion of the Board of
     Directors, such vacancy may be filled by vote of the
     shareholders at a special meeting called for that
     purpose.  A Director so elected to fill a vacancy shall
     serve for the remainder of the then-present term of
     office of the Class to which such Director was elected.
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     Section 6  - Removal:  Any Director, or the entire
     Board of Directors, may be removed; provided, however,
     that such removal must be for cause and must be
     approved in accordance with provisions of this Section
     6.  Removal for cause must be approved by at least
     seventy percent (70%) of the combined voting power of
     the outstanding shares of stock of the corporation then
     entitled to be voted at an election for that Director,
     voting together as a single Class, and the action for
     removal must be brought within three (3) years of the
     occurrence of such cause.

     Section 7 - Compensation:  The Directors shall receive
     such compensation for their service as Directors and as
     members of any committee appointed by the Board as may
     be prescribed by the Board of Directors.  The Directors
     shall also be reimbursed for ordinary and reasonable
     expenses incurred in the performance of their duties. 
     No such payment shall preclude any Director from
     serving the corporation in any other capacity and
     receiving compensation therefor.

ARTICLE VI:  DIRECTORS' MEETINGS

     Section 1 - Regular Meetings:  Regular meetings of the
     Board of Directors shall be held at the principal
     office of the corporation on the third Tuesday of each
     month at 10:00 o'clock A.M., or on such other day of
     the month, time of the day or place, within or without
     the State, as the Board of Directors may designate.

     Section 2 - Special Meetings:  Special meetings of the
     Board of Directors may be held at any time at the
     principal office of the corporation or elsewhere within
     or without the State as shall be specified in the
     notice of such meeting.

     The Secretary shall call a special meeting whenever and
     wherever so requested by the Chairman of the Board, the
     Chief Executive Officer or any three (3) Directors.

     Section 3 - Organization Meeting:  Immediately
     following the meeting of the shareholders at which the
     members of any Class of Directors are elected, the
     members of all Classes of the Board of Directors shall
     meet and organize and transact such other business as
     may properly be presented at such meeting.

     Section 4 - Notice:  No notice shall be required for a
     regular meeting of the Board of Directors or of an
     adjourned meeting.  A reasonable notice of special
     meetings, in writing or otherwise, shall be given to
     each Director or sent to his residence or place of
     business.  Notice of a special meeting shall specify
     the time and place of holding the meeting.  Unless
     otherwise stated in the notice thereof, any and all
     business may be transacted at a special meeting of the
 69
     Board of Directors.  No notice shall be required to be
     given to any Director who signs a written waiver of
     notice before the meeting, at the time of the meeting
     or at any time thereafter.

     Section 5 - Quorum:  At all meetings of the Board of
     Directors a majority of the whole Board shall be
     necessary to constitute a quorum for the transaction of
     any business except the filling of vacancies, but a
     lesser number may convene and adjourn.

     Section 6 - Voting:  All questions coming before any
     meeting of the Board of Directors for action shall be
     decided by a majority vote of all Classes of the Board
     of Directors present at such meeting unless otherwise
     provided by law, the Amended Articles of Incorporation
     or the other provisions of these By-Laws.

ARTICLE VII:  EXECUTIVE COMMITTEE

     Section 1 - Number, Qualification, Appointment,
     Alternates:  The Board of Directors shall appoint not
     less than two (2) Directors who, together with the
     Chairman of the Board and the Chief Executive Officer
     (if other than the Chairman), shall constitute the
     Executive Committee.  The Board of Directors in its
     discretion may also appoint one (1) or more Directors
     as alternate members of the Executive Committee to
     serve in place of any regular member of the Executive
     Committee (other than the Chairman of the Board or the
     Chief Executive Officer) during any period of time when
     such regular member is unavailable as a member of the
     Executive Committee on account of illness, absence or
     otherwise.  The Chief Executive Officer of the
     corporation shall serve as Chairman of the Executive
     Committee.

     Section 2 - Powers and Duties:  The Executive Committee
     shall have and exercise all the authority of the entire
     Board of Directors when the Board is not in session
     with respect to all matters except the following:

     (1)  Amending the Amended Articles of Incorporation;

     (2)  Adopting an Agreement or a Plan of Merger,
          Consolidation or other "Business Combination" as
          that term is defined in Article XI of the Amended
          Articles of Incorporation;

     (3)  Proposing a special corporate transaction such as
          the sale, lease, exchange, mortgage, pledge or
          disposition of all fixed assets of the
          corporation; or

     (4)  Terminating, winding up and/or changing the nature
          of the corporation's business.
 70 
     Section 3 - Term of Office:  The members of the
     Executive Committee shall hold office from the date of
     their appointment until the next succeeding
     organization meeting of the Directors, provided that
     the Board of Directors shall at all times have the
     power to remove any member of the Executive Committee.

     Section 4 - Vacancies:  Any vacancy or vacancies in the
     Executive Committee arising from any cause shall be
     filled by the remaining Directors.

     Section 5 - Fees:  Members of the Executive Committee,
     as such, shall not receive any stated salary for their
     services, but expenses of attendance, if any, and a fee
     in such an amount as may be determined by the Board of
     Directors from time to time shall be paid for
     attendance at each Executive Committee meeting.

     Section 6 - Meetings:  The Executive Committee shall
     meet at such times and places as the Chairman of the
     Board or Chief Executive Officer or a majority of the
     Committee members may designate, provided that
     reasonable notice of such meeting shall be given each
     member.  A majority of the Executive Committee shall
     constitute a quorum for the transaction of all
     business.

     Section 7 - Minutes:  The Executive Committee shall
     keep minutes of all its meetings which shall be
     recorded in the minute book of the corporation and
     shall be promptly submitted to the Board of Directors
     for approval.

ARTICLE VIII:  AUDIT COMMITTEE

     The Board of Directors shall appoint an Audit Committee
     consisting of not less than three (3) nor more than
     five (5) members of the Board of Directors, none of
     whom shall be an officer of the corporation.  Each
     member of the Audit Committee shall receive a fee fixed
     by the Board of Directors for attendance at each
     meeting of the Audit Committee.

ARTICLE IX:  OFFICERS

     Section 1 - Titles:  The mandatory officers of the
     corporation shall consist of a Chairman of the Board, a
     President, a Secretary and a Treasurer.  In addition,
     the Chairman of the Board or the President shall be
     elected by the Board of Directors to be Chief Executive
     Officer of the corporation.  In the event of a vacancy
     in the office of Chief Executive Officer, or the
     absence or disability of the officer serving in such
     capacity, then the other officer eligible to be elected
     to such office (if not one and the same person) shall
     perform the duties of Chief Executive Officer.  The
 71 
     Board of Directors may elect, at the request of the
     Chief Executive Officer, one (1) or more Executive Vice
     Presidents, one (1) or more Senior Vice-Presidents, one
     (1) or more Vice-Presidents, one (1) Controller, one
     (1) or more Assistant Controllers, one (1) or more
     Assistant Secretaries, one (1) or more Assistant
     Treasurers, Assistant or Assistants to the President or
     any Executive Vice-President or Vice-President.

     The Board of Directors may designate the President or
     any Vice President as the Chief Operating Officer of
     the Corporation and may designate any Vice President or
     the Secretary or the Treasurer as the Chief Financial
     Officer of the Corporation.

     Section 2 - Qualifications of the Chairman of the Board
     and President:  The Chairman of the Board and the
     President shall be chosen from among the members of the
     Board of Directors.

     Section 3 - Election of Officers:  The mandatory
     officers of the corporation shall be elected annually
     at the organization meeting of the Board of Directors. 
     Any other officers not so elected at such meeting may
     be elected subsequently at any regular or special
     meeting of the Board.

     Section 4 - Term of Office Qualification and
     Retirement:  All officers shall serve at the pleasure
     of the Board and shall hold office from the date of
     their election until the next succeeding annual
     organization meeting of the Board of Directors or until
     their successors are elected and shall qualify;
     provided, however, that any officer, except those
     having attained age 64 as of January 1, 1989, shall
     tender his resignation to become effective at the end
     of the calendar month during which the officer attains
     his sixty-fifth (65th) birthday.

     Section 5 - Vacancies:  Any vacancy or vacancies among
     the officers arising from any cause may be filled by
     the Board of Directors.

     Section 6 - Compensation of Officers:  The Board of
     Directors shall fix the compensation of the Chief
     Executive Officer, the President, the Chief Operating
     Officer, the Chief Financial Officer and the Chairman
     of the Board, when said Chairman is also serving as an
     active employee of the Company.  The compensation of
     all other officers shall be fixed by the Chief
     Executive Officer.

     Section 7 - Combining Offices:  Any two (2) or more
     offices may be held by the same person except that the
     duties of President and Secretary shall not be
     performed by the same person. 
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ARTICLE X:  POWERS AND DUTIES OF DIRECTORS AND OFFICERS

     Section 1 - Directors:  The business and affairs of the
     corporation shall be managed by the Board of Directors,
     except where specifically excepted by law, the Amended
     Articles of Incorporation or the other provisions of
     these By-Laws.

     Section 2 - Chairman of the Board:  The Chairman of the
     Board shall preside at all meetings of the Board of
     Directors and at all meetings of shareholders and shall
     in general perform all duties incident to the office of
     Chairman of the Board and such other duties as may be
     assigned to him from time to time by the Board of
     Directors.  The Chairman of the Board when acting as
     the Chief Executive Officer shall also exercise the
     duties set forth in Section 3 of this Article X.

     Section 3 - Chief Executive Officer:  The Chief
     Executive Officer of the corporation shall have the
     general control and management of its business and
     affairs subject to the control of the Board of
     Directors.

     Section 4 - President:  The President shall perform all
     duties as may be assigned to him from time to time by
     the Chief Executive Officer (if other than the
     President) or by the Board of Directors.  The President
     when acting as the Chief Executive Officer of the
     corporation shall also exercise the duties set forth in
     Section 3 of this Article X.

     Section 5 - Vice-Presidents:  The Executive, Senior or
     other Vice-Presidents shall have such responsibilities
     and perform such duties as may be respectively assigned
     to them from time to time by the Board of Directors,
     the Executive Committee or the Chief Executive Officer. 
     In the absence or disability of the President, an
     Executive Vice-President or a Senior Vice-President may
     be designated by the Board of Directors or Executive
     Committee to perform and exercise all of the powers of
     the President.

     Section 6 - Secretary:  The Secretary shall have the
     custody of the corporate seal and records of the
     corporation and be in charge of all the records and
     accounts of the corporation.  He shall act as Secretary
     at meetings of the shareholders, Directors and
     Executive Committee and enter the minutes of such
     meetings in a book provided for that purpose and shall
     attend to publishing, giving and serving all official
     notices of the corporation.  He shall perform such
     other duties as may be assigned to him.

     Section 7 - Assistant Secretaries:  In the absence or
     disability of the Secretary, the Assistant Secretaries
     shall act with all the powers of the Secretary.  They
     shall perform such other duties as may be assigned to
     them.
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     Section 8 - Treasurer:  The Treasurer shall have the
     custody of all negotiable instruments and securities of
     the corporation and be in charge of collection of
     amounts due the corporation.  He shall disburse the
     funds of the corporation only by check upon properly
     authorized vouchers and shall keep a record of all
     receipts and disbursements by him.  He shall have
     authority to give receipts for moneys paid to the
     corporation and to endorse checks, drafts and other
     instruments for the payment of money for deposit or
     collection where necessary or proper and to deposit the
     same to the credit of the corporation in such bank or
     banks or depositary as the Board of Directors or the
     Executive Committee may designate and he may endorse
     all commercial documents requiring endorsements for or
     on behalf of the corporation.  He shall perform such
     other duties as may be assigned to him.

     Section 9 - Assistant Treasurers:  In the absence or
     disability of the Treasurer, the Assistant Treasurers
     shall act with all the powers of the Treasurer.  They
     shall perform such other duties as may be assigned to
     them.

     Section 10 - Controller:  The Controller shall have
     general supervision of the accounting of the
     corporation including the preparation of all pertinent
     accounting reports.  He shall perform such other duties
     as may be assigned to him.  In the event that a
     Controller has not been elected by the Board of
     Directors, the powers and duties of the Controller
     shall be assigned to the Treasurer.

     Section 11 - Assistant Controllers:  In the absence or
     disability of the Controller, the Assistant Controllers
     shall act with all the powers of the Controller.  They
     shall perform such other duties as may be assigned to
     them.

ARTICLE XI:  STOCK

     Section 1 - Stock Certificates:  Each shareholder shall
     be entitled to a certificate signed by the President or
     a VicePresident and the Secretary or an Assistant
     Secretary of the corporation and sealed with the
     corporate seal of the corporation, certifying to the
     number of shares owned by him in the corporation.  If
     such certificate is counter-signed by the written
     signature of a transfer agent other than the
     corporation or its employee, the signatures of the
     officers of the corporation may be facsimiles.  If such
     certificate is counter-signed by the written signature
     of a registrar other than the corporation or its
     employee, the signatures of the transfer agent and the
     officers of the corporation may be facsimiles.  In case
     any officer, transfer agent or registrar who has signed
     or whose facsimile signature has been placed upon a
     certificate shall have ceased to be such officer,
     transfer agent or registrar before such certificate is
 74
     issued, it may be issued by the corporation with the
     same effect as if he were such officer, transfer agent
     or registrar at the date of its issue.

     Section 2 - Transfer of Shares:  Stock shall be
     transferable on the stock transfer books of the
     corporation in person or by attorney duly authorized
     and upon surrender and cancellation of the old
     certificates therefor.

     The Board of Directors of the corporation may close its
     stock transfer books for a period not exceeding fifty
     (50) days preceding the date of any meeting of
     shareholders or the date for the payment of any
     dividend.  In lieu of closing the stock transfer books
     the Board of Directors may fix in advance a date not
     more than fifty (50) days prior to the date of any
     meeting of shareholders or the date for the payment of
     any dividend as the record date for the determination
     of the shareholders entitled to notice of and to vote
     at any such meeting or entitled to receive payment of
     such dividend; and such shareholders, and only such
     shareholders, as shall be shareholders of record on the
     date so fixed shall be entitled to such notice of and
     to vote at such meeting or be entitled to receive
     payment of such dividend, as the case may be,
     notwithstanding the transfer of any stock on the books
     of the corporation after such record date fixed as
     aforesaid.  If the stock transfer books are not closed
     and no record date is fixed by the Board of Directors,
     no shares shall be voted at any meeting which shall
     have been transferred on the books of the corporation
     within ten (10) days next preceding the date of such
     meeting.

     Section 3 - Replacing Certificates:  In case of the
     loss or destruction of any certificate of stock and the
     submission of proper proof thereof by the owner, a new
     certificate may be issued in lieu thereof under such
     regulations and restrictions as the Board of Directors
     may prescribe.

ARTICLE XII:  AUTHORIZED SIGNATURES

     All checks, drafts and other negotiable instruments
     issued by the corporation shall be made in the name of
     the corporation and shall be signed by such one (1) of
     the officers of the corporation and countersigned by
     such other officer of the corporation or by such other
     person as the Board of Directors from time to time
     direct; provided, however, that the same person shall
     not both sign and countersign the same instrument;
     provided further, that dividend checks, payroll checks,
     customer deposit refund checks and cashier's checks
     drawn upon special accounts with designated
     depositaries need not be countersigned.
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ARTICLE XIII:  FIDELITY BONDS

     The officers and employees of the corporation shall, in
     the discretion of the Board of Directors, Executive
     Committee or Chief Executive Officer, give bonds for
     the faithful discharge of their respective duties in
     such form and for such amounts as they or any of them
     may direct.

ARTICLE XIV:  INDEMNIFICATION

     Section 1 - Every person (and the heirs, executors and
     administrators of such person) who is or was a director
     or officer of this corporation or of any subsidiary of
     this corporation or who, at the request of this
     corporation, served in any position or capacity or on
     any committee for this corporation or for or in any
     other corporation, partnership, association, trust,
     foundation, not-for-profit corporation, employee
     benefit plan or other organization or entity, shall be
     indemnified by the corporation against any and all
     liability and reasonable expense that may be incurred
     by him in connection with or resulting from any claim,
     action, suit or proceeding in which either (i) such
     person is wholly successful, thereby entitling such
     person to Mandatory Indemnification, or (ii) such
     person is not wholly successful but it is nevertheless
     determined, pursuant to the procedures set forth below
     in Section 2 of this Article IX of these By-Laws, that
     such person acted in good faith and that such person
     reasonably believed that (a) in the case of conduct in
     his official capacity, his conduct was in the
     corporation's best interests, or (b) in all other
     cases, his conduct was at least not opposed to the best
     interests of such corporation, entity or organization,
     and, in addition, with respect to any criminal action
     or proceeding, either had reasonable cause to believe
     his conduct was lawful or had no reasonable cause to
     believe his conduct was unlawful, thereby entitling
     such person to Permissive Indemnification.  The terms
     "claim", "action", "suit" or "proceeding" shall mean
     and include any claim, action, suit or proceeding
     (whether brought by or in the right of the corporation
     or any other corporation or otherwise), civil,
     criminal, administrative or investigative action, or
     threat thereof, in which a director or officer of the
     corporation (or his heirs, executors or administrators)
     may become involved as a party or otherwise:

     (a)  by reason of his being or having been a director
          or officer of the corporation, or of any
          subsidiary corporation of the corporation, or of
          any other corporation where he served as such at
          the request of the corporation, or

     (b)  by reason of his acting or having acted in any
          position or capacity or on any committee for this
 76     
          corporation or any subsidiary corporation of this
          corporation or in any position or capacity in or
          for a partnership, association, trust, foundation,
          not-for-profit corporation, employee benefit plan
          or other organization or entity where he served as
          such at the request of the corporation, or

     (c)  by reason of any action taken or not taken by him
          in any such capacity, whether or not he continues
          in such capacity at the time such liability or
          expense shall have been incurred.

     The terms "liability" and "expenses" shall include, but
     shall not be limited to, counsel fees and disbursements
     and amounts of judgments, fines or penalties against,
     and amounts paid in settlement by or on behalf of, a
     person, and excise taxes assessed with respect to an
     employee benefit plan, but shall not on account of
     profits realized by him in the purchase or sale of
     securities of the corporation.  The term "wholly
     successful" shall mean termination of any action, suit
     or proceeding against the person in question without
     any finding of liability or guilt against him or the
     expiration of a reasonable period of time after the
     making of any claim or threat of an action, suit or
     proceeding with out the institution of the same,
     without any payment or promise made to induce a
     settlement.

     Section 2 - With regard to Permissive Indemnification,
     the determination that a person acted in good faith and
     that such person reasonably believed that (a) in the
     case of conduct in his official capacity, his conduct
     was in the corporation's best interests, or (b) in all
     other cases, his conduct was at least not opposed to
     the best interests of the corporation, and, in
     addition, with respect to any criminal action or
     proceeding, either had reasonable cause to believe that
     his conduct was lawful or had no reasonable cause to
     believe that his conduct was unlawful with regard to a
     specific claim, action, suit or proceeding in or as to
     which such person is not wholly successful shall be
     made by or for the board of directors of the
     corporation in the manner hereinafter described.  Any
     request for such indemnification must first be proposed
     to the board of directors of the corporation, and a
     motion for such indemnification may be made by any
     director of the corporation, including a director who
     is seeking such indemnification for himself.  If a
     quorum of directors eligible to decide the matter
     exists within the limitations and requirements of I. C.
     23-1-37-12(b)(1), such directors may either (i) decide
     the question themselves; (ii) refer the matter to
     Special Legal Counsel for decision pursuant to I. C.
     23-1-37-12(b)(3)(A); or (iii) decline to take any
     action to either decide the question of such
     indemnification or refer the matter for decision to
     Special Legal Counsel.  If there does not exist a
 77
     quorum of directors eligible to decide the matter
     within the limitations and requirements of I.C. 23-1-
     37-12(b)(1), a majority of the entire board of
     directors may either (i) refer the matter to a
     committee of two or more directors who are eligible to
     vote thereon pursuant to I.C. 23-1-37-12(b)(2) who may
     either decide the matter themselves or refer the matter
     to Special Legal Counsel for decision pursuant to I.C.
     23-1-37-12(b)(3)(B); or (iii) decline to take any
     action to refer the matter of such indemnification to a
     committee or to Special Legal Counsel.  Any decision on
     the question of entitlement to such Permissive
     Indemnification by a majority of a quorum of the board
     of directors eligible to vote pursuant to I.C. 23-1-37-
     12(b)(1); by a special committee of eligible directors
     pursuant to I.C. 23-1-27-12(b)(2); or by Special Legal
     Counsel duly appointed pursuant to the provisions of
     I.C. 23-1-37-12(b)(3), shall be in the sole and
     absolute discretion of such person or persons who are
     to make such determination.  If it is determined and
     decided that such Permissive Indemnification should be
     given in a specific situation, the authorization for
     such indemnification and a determination of the amount
     thereof shall be made in accordance with the procedures
     and requirements of I.C. 23-1-37-12(c).  For purposes
     of this Section 2, Permissive Indemnification shall be
     deemed to have been denied (i) if a majority of any
     group of persons who are to decide the question do not
     vote in favor of the proposed indemnification; (ii) if
     the board of directors or any committee thereof
     declines to take any permitted action to either decide
     the question, refer it to a committee, or refer it to
     Special Legal Counsel; (iii) if no decision is made by
     the person or persons who were to decide such question
     within a period of six (6) months after such
     indemnification was first proposed to the board of
     directors of the corporation; or (iv) to the extent
     that the dollar amount of any indemnification to be
     made by the corporation is less than the total dollar
     amount of indemnification proposed or requested to be
     made.  If proposed Permissive Indemnification is
     denied, the question may not be reconsidered at any
     subsequent time by the corporation.

     Section 3 - Expenses incurred with respect to any
     claim, action, suit or proceeding may be advanced by
     the corporation (by action of the board of directors,
     whether or not a disinterested quorum exists) prior to
     the final disposition thereof upon receipt of an
     undertaking by or on behalf of the recipient to repay
     such amount unless he is entitled to indemnification
     under this Article of these By-Laws.

     Section 4 - The rights of Mandatory and Permissive
     Indemnification provided in this Article of the By-Laws
     shall be in addition to any rights to which any such
     person may otherwise be entitled by contract, as matter
     of law, or pursuant to I.C. 23-1-37.  Any person
     claiming the right to indemnification pursuant to any
 78
     provisions of these By-Laws may at any time apply for
     indemnification to or seek review of any decision
     denying indemnification or determining the amount
     thereof by a court pursuant to I.C. 23-1-37-11. 
     Persons who are not directors or officers of the
     corporation but who are employees or agents of the
     corporation or any subsidiary or who are directors or
     officers of any subsidiary may be indemnified to the
     extent authorized at any time or from time to time by
     the board of directors.

     Section 5 - Irrespective of the provisions of this
     Article of the By-Laws, the board of directors may, at
     any time or from time to time, approve indemnification
     of directors and officers or other persons to the full
     extent permitted by the provisions of the Indiana
     Business Corporation Law at the time in effect, whether
     on account of past or future transactions.

     Section 6 - To the extent not inconsistent with Indiana
     law as in effect from time to time, the board of
     directors may, at any time or from time to time,
     approve the purchase and maintenance of insurance on
     behalf of any such director, officer or other person
     against any liability asserted against him in his
     capacity or arising out of his status as a director,
     officer, employee or agent of the corporation or any
     corporation, partnership, association, employee benefit
     plan, trust, foundation, not-for-profit corporation or
     other organization or entity in which he served as such
     at the request of the corporation, whether or not the
     corporation would have the power to indemnify him under
     the provisions of this Article of the By-Laws.  In the
     event that any expense or liability otherwise subject
     to indemnification hereunder is covered entirely or in
     part by any insurance, the indemnification provided for
     by this Article of these By-Laws shall only be
     available, if at all, as to any uninsured liability or
     expense or that portion which is in excess of the
     amount of all available insurance coverage.  Under no
     circumstances shall any insurer or other person making
     payment under such an insurance policy or contract be
     subrogated to the rights of any person entitled to
     indemnification under this Article of these By-Laws.

     Section 7 - Any and all references contained in Article
     XIV of these By-Laws to any provision, section, sub-
     section or portion of the Indiana Code (I.C.) shall
     mean the Indiana Code as the same existed on June 26,
     1987, and no subsequent amendment, repeal,
     modification, change, or judicial invalidation of any
     provision of the Indiana Code subsequent to June 26,
     1987, shall alter, modify, or otherwise affect these
     By-Laws, and these By-Laws shall be construed and
     interpreted under the statutory law of the State of
     Indiana as it existed as of the date of adoption of
     these By-Laws.
 79
     Section 8 - The indemnification herein required or
     permitted by these By-Laws shall be a contractual
     obligation, under-taking and commitment of the
     corporation as to any person who either continued to
     serve or commenced to serve, following the date of the
     adoption of these amended indemnification By-Laws, as a
     director or officer of this corporation or any
     subsidiary of this corporation, or in any other
     position or capacity, at the request of this
     corporation or any subsidiary corporation, on any
     committee, partnership, association, trust, foundation,
     not-for-profit corporation, employee benefit plan, or
     other organization or entity, and no subsequent
     amendment or repeal of these By-Laws and no judicial
     decision invalidating the legislation authorizing the
     indemnification provided for by these By-Laws or
     invalidating all or any part of these indemnification
     By-Laws shall in any manner deny, diminish, limit,
     restrict, or qualify the indemnification herein
     provided for any such person who so continued to serve
     or commenced to serve with regard to any claim
     concerning any matter which occurred, which commenced
     to occur, or which continued to occur subsequent to the
     adoption of these indemnification By-Laws and prior to
     any such amendment, repeal, or judicial invalidation.

ARTICLE XV:  MISCELLANEOUS

     Section 1 - Depositaries:  The funds of the corporation
     shall be deposited in the name of the corporation with
     such depositaries as may be designated by the Board of
     Directors.

     Section 2 - Gender:  The masculine pronoun wherever
     used in these By-Laws shall mean or include the
     feminine pronoun where applicable.

ARTICLE XVI:  AMENDMENTS

     These By-Laws may be altered, amended or repealed by a
     majority vote of the whole Board of Directors at any
     meeting, the notice of which shall include notice of
     the proposed alteration, amendment or repeal.




EX-4
3
EX- 4(A) INDENTURES


 81


                                       [Conformed]







            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                           WITH

                     BANKERS TRUST COMPANY, 

                                            As Trustee








                     SUPPLEMENTAL INDENTURE

                Providing among other things for

                      FIRST MORTGAGE BONDS

                     Series A 1993 due 2028

                               and
                                
                     Series B 1993 due 2023




                     Dated as of May 1, 1993







 82
     SUPPLEMENTAL INDENTURE, dated as of May 1, 1993,
between Southern Indiana Gas and Electric Company, a
corporation organized and existing under the laws of the
State of Indiana (hereinafter called the "Company"), party
of the first part, and Bankers Trust Company, a corporation
organized and existing under the laws of the State of New
York, as Trustee under the Mortgage hereinafter referred to,
party of the second part.

     Whereas, the Company heretofore executed and delivered
to Bankers Trust Company, as Trustee (hereinafter called the
"Trustee"), a certain Indenture of Mortgage and Deed of
Trust dated as of April 1, 1932, to secure an issue of bonds
of the Company, issued and to be issued in series, from time
to time, in the manner and subject to the conditions set
forth in the said Indenture, and the said Indenture has been
amended and supplemented by Supplemental Indentures dated as
of August 31, 1936, October 1, 1937, March 22, 1939, July 1,
1948, June 1, 1949, October 1, 1949, January 1, 1951, April
1, 1954, March 1, 1957, October 1, 1965, September 1, 1966,
August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972,
October 1, 1973, April 1, 1975, January 15, 1977, April 1,
1978, June 4, 1981, January 20, 1983, November 1, 1983,
March 1, 1984, June 1, 1984, November 1, 1984, July 1, 1985,
November 1, 1985, June 1, 1986, November 15, 1986, January
15, 1987, December 15, 1987, December 13, 1990 and April 1,
1993, which Indenture as so amended and supplemented is
hereinafter referred to as the "Mortgage" and as further
supplemented by this Supplemental Indenture is hereinafter
referred to as the "Indenture"; and

     Whereas, the Mortgage provides that the Company and the
Trustee may, from time to time, enter into such indentures
supplemental to the Mortgage as shall be deemed by them
necessary or desirable, to establish the terms and
provisions of any series of bonds to be issued under said
Mortgage and to add to the covenants and agreements of the
Company for the protection of the holders of bonds and of
the mortgaged and pledged property; and

     Whereas, the Company has entered into a Loan Agreement
dated as of May 1, 1993 with Warrick County, Indiana (the
"County") pursuant to which the County will issue
$22,200,000 aggregate principal amount of its Adjustable
Rate Environmental Improvement Bonds, 1993 Series A
(Southern Indiana Gas and Electric Company Project) in order
to provide funds to loan to the Company for the purpose of
financing a portion of the costs of acquiring, constructing
and equipping certain pollution control facilities, and
pursuant to such Loan Agreement the Company has agreed to
issue a series of its bonds under the Indenture in order to
evidence and secure certain of its indebtedness under the
Loan Agreement; and
 83
     Whereas, the Company has entered into a Loan Agreement
dated as of May 1, 1993 with the County pursuant to which
the County will issue $22,800,000 aggregate principal amount
of its Adjustable Rate Environmental Improvement Bonds, 1993
Series B (Southern Indiana Gas and Electric Company Project)
in order to provide funds to loan to the Company for the
purpose of financing a portion of the costs of acquiring,
constructing and equipping certain pollution control
facilities, and pursuant to such Loan Agreement the Company
has agreed to issue a series of its bonds under the
Indenture in order to evidence and secure certain of its
indebtedness under the Loan Agreement; and

     Whereas, the Company and the Trustee deem it necessary
or desirable to enter into this Supplemental Indenture for
such purposes; and

     Whereas, the Company by appropriate corporate action in
conformity with the terms of the Indenture has duly
determined to create a series of bonds which shall be issued
under the Indenture in an aggregate principal amount of
$22,200,000 and be designated as "First Mortgage Bonds,
Series A 1993 due 2028" (hereinafter sometimes referred to
as "Bonds of the Thirty-fifth Series"), shall bear interest
at the rate per annum set forth in, shall be subject to
certain optional and mandatory redemption rights and
obligations set forth in, and will otherwise be in the form
and have the terms and provisions provided for in this
Supplemental Indenture and set forth in the form of such
bonds below; and 

     Whereas, the Company by appropriate corporate action in
conformity with the terms of the Indenture has duly
determined to create a series of bonds which shall be issued
under the Indenture in an aggregate principal amount of
$22,800,000 and be designated as "First Mortgage Bonds,
Series B 1993 due 2023" (hereinafter sometimes referred to
as "Bonds of the Thirty-sixth Series"), shall bear interest
at the rate per annum set forth in, shall be subject to
certain optional and mandatory redemption rights and
obligations set forth in, and will otherwise be in the form
and have the terms and provisions provided for in this
Supplemental Indenture and set forth in the form of such
bonds below; and 

     Whereas, the definitive registered bonds without
coupons of the Thirty-fifth Series and the Trustee's
certificate of authentication to be borne by such bonds are
to be substantially in the following forms, respectively:


 84
   [FORM OF FULLY REGISTERED BOND OF THE THIRTY-FIFTH SERIES]

                     [FORM OF FACE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               FIRST MORTGAGE BOND, SERIES A 1993

                            DUE 2028

No________________                            $__________.


     Southern Indiana Gas and Electric Company, a
corporation of the State of Indiana (hereinafter called the
Company), for value received, hereby promises to pay to

                      or registered assigns
dollars, on May 1, 2028 at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
N.Y., in any coin or currency of the United States of
America which at the time of payment is legal tender for the
payment of public and private debts, and to 0ay to the
registered owner hereof interest thereon from the interest
payment date (May 1 or November 1) next preceding the date
of this bond unless the date hereof is prior to November 1,
1993, in which case from May 1, 1993 (or, if this bond is
dated between the record date for any interest payment date
and such interest payment date, then from such interest
payment date), at the rate from time to time borne by the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project) (the "Warrick County Bonds") issued by Warrick
County, Indiana (the "County") under the Indenture of Trust,
dated as of May 1, 1993 (the "County Indenture"), between
the County and The Citizens National Bank of Evansville, as
trustee (the "County Trustee"); provided, however, that in
no event shall the rate of interest borne by the Bonds of
this series exceed 10% per annum.  Such interest, in like
coin or currency, payable at said office or agency semi-
annually on May 1 and November 1 in each year, until the
Company's obligation with respect to the payment of such
principal shall have been discharged; provided, however,
that the amount of interest payable as set forth above on
any interest payment date (the "Original Interest Amount")
shall be reduced by an amount equal to the difference, if
any, between the Original Interest Amount and the amount of
interest due and payable on such interest payment date on a
like principal amount of Warrick County Bonds.  The
 85
principal and interest so payable on any May 1 or November 1
will, subject to certain exceptions provided in the Mortgage
hereinafter mentioned, be paid to the person in whose name
this bond is registered at the close of business on the
record date, which shall be the April 15 or October 15, as
the case may be, next preceding such interest payment date,
or, if such April 15 or October 15 shall be a legal holiday
or a day on which banking institutions in the Borough of
Manhattan, The City of New York, N.Y., are authorized or
obligated by law to close, the next preceding day which
shall not be a legal holiday or a day on which such
institutions are so authorized or obligated to close.

     The provisions of this bond are continued on the
reverse hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at
this place. 

     This bond shall not become obligatory until Bankers
Trust Company, the Trustee under the Mortgage, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

     In witness whereof, Southern Indiana Gas and Electric
Company has caused this bond to be signed in its name by its
President or a Vice President, by his signature or a
facsimile thereof, and a facsimile of its corporate seal to
be imprinted hereon, attested by its Secretary or an
Assistant Secretary, by his signature or a facsimile
thereof.

Dated:

                         SOUTHERN INDIANA GAS AND
                           ELECTRIC COMPANY


                         By:______________________________
                                 President and
                              Chief Executive Officer

Attest:


_______________________________
     Secretary


 86
                 [FORM OF TRUSTEE'S CERTIFICATE]

     This bond is one of the bonds of the series designated
therein, described in the within-mentioned Mortgage.

                    BANKERS TRUST COMPANY,
                                   as Trustee,


                    By:_______________________________
                       Authorized Officer





                    [FORM OF REVERSE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

           FIRST MORTGAGE BOND, SERIES A 1993 DUE 2028


     This bond is one of an issue of First Mortgage Bonds of
the Company, issuable in series, and is one of the series
designated in the title hereof, all issued and to be issued
under and equally secured (except as to any sinking fund
established in accordance with the provisions of the
Mortgage hereinafter mentioned for the bonds of any
particular series) by an Indenture of Mortgage and Deed of
Trust, dated as of April 1, 1932, executed by the Company to
Bankers Trust Company, as Trustee (the "Trustee"), as
amended and supplemented by indentures supplemental thereto,
including without limitation a Supplemental Indenture dated
as of May 1, 1993, to which Indenture as so amended and
supplemented (herein referred to as the Mortgage) reference
is made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights
of the holders of the bonds in respect thereof and the terms
and conditions upon which the bonds are secured.

     The Bonds of this series are issued and to be issued in
order to evidence and secure a loan made by the County to
the Company pursuant to a Loan Agreement dated as of May 1,
1993.  In order to provide moneys to fund such loan, the
County has issued the Warrick County Bonds under and
pursuant to the County Indenture.  Payments made by the
 87
Company of principal and interest on the Bonds of this
series are intended to be sufficient to permit payments of
principal and interest to be made on the Warrick County
Bonds.  Upon certain terms and conditions, moneys held under
and pursuant to the County Indenture, including moneys so
held from the proceeds of the sale of the Warrick County
Bonds or earnings on the investment of such proceeds, or
redemption of the Warrick County Bonds shall be credited to
or used for the payment of the Bonds of this series and to
the extent so credited or used shall satisfy a like amount
otherwise due hereunder.

     The Bonds of this series are subject to mandatory
redemption, in whole or in part, as the case may be, on each
date that Warrick County Bonds are to be redeemed.  The
principal amount of the Bonds of this series to be redeemed
on any such date shall be equal to the principal amount of
Warrick County Bonds called for redemption on that date. 
All redemptions of Bonds of this series shall be at 100% of
the principal amount thereof, plus accrued interest to the
redemption date.

     If and whenever the Trustee or the Company is notified
that an event of default has occurred and is continuing
under Section 901(d) of the County Indenture, and provided
that the principal of all Warrick County Bonds then
outstanding and the interest thereon shall have been
declared immediately due and payable, then not later than 2
business days following the occurrence of the foregoing
events, the Company shall, upon not less than 30 days' and
not more than 45 days' prior written notice given in the
manner provided in the Mortgage, call for redemption on a
redemption date selected by it not later than 45 days
following the date of such notice, all of the Bonds of this
series then outstanding, and shall on such redemption date
redeem the same at a price equal to 100% of the principal
amount thereof, together with accrued interest thereon to
the redemption date, except that such requirement or
redemption shall be deemed to be waived if, prior to the
date fixed for such redemption of the Bonds of this series,
such event of default is waived or cured.

     In case a completed default, as defined in the
Mortgage, shall occur, the principal of this bond and all
other bonds of the Company at any such time outstanding
under the Mortgage may be declared or may become due and
payable, upon the conditions and in the manner and with the
effect provided in the Mortgage.  The Mortgage provides that
such declaration may in certain events be waived by the
holders of a majority in principal amount of the bonds
entitled to vote then outstanding.
     
     This bond, subject to the limitations with regard
thereto contained in the County Indenture, is transferable
 88
as prescribed in the Mortgage by the registered owner hereof
in person, or by his duly authorized attorney, at the office
or agency of the Company in the Borough of Manhattan, The
City of New York, N.Y., upon surrender and cancellation of
this bond, and thereupon, a new fully registered bond of the
same series for a like principal amount will be issued to
the transferee in exchange thereof as provided in the
Mortgage, and upon payment, if the Company shall require it,
of the charges therein prescribed.  The Company and the
Trustee may deem and treat the person in whose name this
bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal and
interest due hereon and for all other purposes.

     The Bonds of this series are issuable as registered
bonds without coupons in denominations of $1,000 and
authorized multiples thereof.  In the manner and upon
payment of the charges prescribed in the Mortgage,
registered bonds without coupons of this series may be
exchanged for a like aggregate principal amount of fully
registered bonds without coupons of other authorized
denominations of the same series, upon presentation and
surrender thereof, for cancellation, to the Trustee at its
principal corporate trust office in the Borough of
Manhattan, The City of New York, N.Y.

     No recourse shall be had for the payment of the
principal of or interest on this bond against any
incorporator or any past, present or future subscriber to
the capital stock, stockholder, office or director of the
Company or of any predecessor or successor corporation,
either directly or through the Company or any predecessor or
successor corporation, under any rule of law, statute or
constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers,
stockholders, officers and directors being released by the
holder or owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the
Mortgage.

     Pursuant to the Mortgage, the holder or owner of this
bond by his acceptance hereof is deemed to have agreed to
amendments to the Mortgage which will eventually permit
certain amendments to the Mortgage with the consent of the
holders of 66-2/3% of the principal amount of the
outstanding bonds of all series issued under the Mortgage
and which redefine, effective at such time as all bonds of
each series of bonds issued under the Mortgage prior to
January 1, 1977 are no longer outstanding, the amounts
required to be spent by the Company under the Mortgage for
the repair, maintenance, renewal and replacement of its
property.

                      [END OF FORM OF BOND]
and
 89
     Whereas, the definitive registered bonds without
coupons of the Thirty-sixth Series and the Trustee's
certificate of authentication to be borne by such bonds are
to be substantially in the following forms, respectively:


   [FORM OF FULLY REGISTERED BOND OF THE THIRTY-SIXTH SERIES]

                     [FORM OF FACE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               FIRST MORTGAGE BOND, SERIES B 1993

                            DUE 2023

No_____________                               $__________


     Southern Indiana Gas and Electric Company, a
corporation of the State of Indiana (hereinafter called the
Company), for value received, hereby promises to pay to

                      or registered assigns
dollars, on May 1, 2023 at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
N.Y., in any coin or currency of the United States of
America which at the time of payment is legal tender for the
payment of public and private debts, and to pay to the
registered owner hereof interest thereon from the interest
payment date (May 1 or November 1) next preceding the date
of this bond unless the date hereof is prior to November 1,
1993, in which case from May 1, 1993 (or, if this bond is
dated between the record date for any interest payment date
and such interest payment date, then from such interest
payment date), at the rate from time to time borne by the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series B (Southern Indiana Gas and Electric Company
Project) (the "Warrick County Bonds") issued by Warrick
County, Indiana (the "County") under the Indenture of Trust,
dated as of May 1, 1993 (the "County Indenture"), between
the County and The Citizens National Bank of Evansville, as
trustee (the "County Trustee"); provided, however, that in
no event shall the rate of interest borne by the Bonds of
this series exceed 10% per annum.  Such interest, in like
coin or currency, payable at said office or agency semi-
annually on May 1 and November 1 in each year, until the
Company's obligation with respect to the payment of such
 90
principal shall have been discharged; provided, however,
that the amount of interest payable as set forth above on
any interest payment date (the "Original Interest Amount")
shall be reduced by an amount equal to the difference, if
any, between the Original Interest Amount and the amount of
interest due and payable on such interest payment date on a
like principal amount of Warrick County Bonds.  The
principal and interest so payable on any May 1 or November 1
will, subject to certain exceptions provided in the Mortgage
hereinafter mentioned, be paid to the person in whose name
this bond is registered at the close of business on the
record date, which shall be the April 15 or October 15, as
the case may be, next preceding such interest payment date,
or, if such April 15 or October 15 shall be a legal holiday
or a day on which banking institutions in the Borough of
Manhattan, The City of New York, N.Y., are authorized or
obligated by law to close, the next preceding day which
shall not be a legal holiday or a day on which such
institutions are so authorized or obligated to close.

     The provisions of this bond are continued on the
reverse hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at
this place. 

     This bond shall not become obligatory until Bankers
Trust Company, the Trustee under the Mortgage, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

     In witness whereof, Southern Indiana Gas and Electric
Company has caused this bond to be signed in its name by its
President or a Vice President, by his signature or a
facsimile thereof, and a facsimile of its corporate seal to
be imprinted hereon, attested by its Secretary or an
Assistant Secretary, by his signature or a facsimile
thereof.

Dated:
                         SOUTHERN INDIANA GAS AND
                           ELECTRIC COMPANY


                         By:______________________________
                              President and
                              Chief Executive Officer
Attest:


_______________________________
     Secretary

 91
                 [FORM OF TRUSTEE'S CERTIFICATE]

     This bond is one of the bonds of the series designated
therein, described in the within-mentioned Mortgage.

                         BANKERS TRUST COMPANY,
                                        as Trustee,


                         By:_______________________________
                              Authorized Officer


                    [FORM OF REVERSE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

           FIRST MORTGAGE BOND, SERIES B 1993 DUE 2023


     This bond is one of an issue of First Mortgage Bonds of
the Company, issuable in series, and is one of the series
designated in the title hereof, all issued and to be issued
under and equally secured (except as to any sinking fund
established in accordance with the provisions of the
Mortgage hereinafter mentioned for the bonds of any
particular series) by an Indenture of Mortgage and Deed of
Trust, dated as of April 1, 1932, executed by the Company to
Bankers Trust Company, as Trustee (the "Trustee"), as
amended and supplemented by indentures supplemental thereto,
including without limitation a Supplemental Indenture dated
as of May 1, 1993, to which Indenture as so amended and
supplemented (herein referred to as the Mortgage) reference
is made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights
of the holders of the bonds in respect thereof and the terms
and conditions upon which the bonds are secured.

     The Bonds of this series are issued and to be issued in
order to evidence and secure a loan made by the County to
the Company pursuant to a Loan Agreement dated as of May 1,
1993.  In order to provide moneys to fund such loan, the
County has issued the Warrick County Bonds under and
pursuant to the County Indenture.  Payments made by the
Company of principal and interest on the Bonds of this
series are intended to be sufficient to permit payments of
principal and interest to be made on the Warrick County
92
Bonds.  Upon certain terms and conditions, moneys held under
and pursuant to the County Indenture, including moneys so
held from the proceeds of the sale of the Warrick County
Bonds or earnings on the investment of such proceeds, or
redemption of the Warrick County Bonds shall be credited to
or used for the payment of the Bonds of this series and to
the extent so credited or used shall satisfy a like amount
otherwise due hereunder.

     The Bonds of this series are subject to mandatory
redemption, in whole or in part, as the case may be, on each
date that Warrick County Bonds are to be redeemed.  The
principal amount of the Bonds of this series to be redeemed
on any such date shall be equal to the principal amount of
Warrick County Bonds called for redemption on that date. 
All redemptions of Bonds of this series shall be at 100% of
the principal amount thereof, plus accrued interest to the
redemption date.

     If and whenever the Trustee or the Company is notified
that an event of default has occurred and is continuing
under Section 901(d) of the County Indenture, and provided
that the principal of all Warrick County Bonds then
outstanding and the interest thereon shall have been
declared immediately due and payable, then not later than 2
business days following the occurrence of the foregoing
events, the Company shall, upon not less than 30 days' and
not more than 45 days' prior written notice given in the
manner provided in the Mortgage, call for redemption on a
redemption date selected by it not later than 45 days
following the date of such notice, all of the Bonds of this
series then outstanding, and shall on such redemption date
redeem the same at a price equal to 100% of the principal
amount thereof, together with accrued interest thereon to
the redemption date, except that such requirement or
redemption shall be deemed to be waived if, prior to the
date fixed for such redemption of the Bonds of this series,
such event of default is waived or cured.

     In case a completed default, as defined in the
Mortgage, shall occur, the principal of this bond and all
other bonds of the Company at any such time outstanding
under the Mortgage may be declared or may become due and
payable, upon the conditions and in the manner and with the
effect provided in the Mortgage.  The Mortgage provides that
such declaration may in certain events be waived by the
holders of a majority in principal amount of the bonds
entitled to vote then outstanding.
     
     This bond, subject to the limitations with regard
thereto contained in the County Indenture, is transferable
as prescribed in the Mortgage by the registered owner hereof
in person, or by his duly authorized attorney, at the office
or agency of the Company in the Borough of Manhattan, The
 93
City of New York, N.Y., upon surrender and cancellation of
this bond, and thereupon, a new fully registered bond of the
same series for a like principal amount will be issued to
the transferee in exchange thereof as provided in the
Mortgage, and upon payment, if the Company shall require it,
of the charges therein prescribed.  The Company and the
Trustee may deem and treat the person in whose name this
bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal and
interest due hereon and for all other purposes.

     The Bonds of this series are issuable as registered
bonds without coupons in denominations of $1,000 and
authorized multiples thereof.  In the manner and upon
payment of the charges prescribed in the Mortgage,
registered bonds without coupons of this series may be
exchanged for a like aggregate principal amount of fully
registered bonds without coupons of other authorized
denominations of the same series, upon presentation and
surrender thereof, for cancellation, to the Trustee at its
principal corporate trust office in the Borough of
Manhattan, The City of New York, N.Y.

     No recourse shall be had for the payment of the
principal of or interest on this bond against any
incorporator or any past, present or future subscriber to
the capital stock, stockholder, office or director of the
Company or of any predecessor or successor corporation,
either directly or through the Company or any predecessor or
successor corporation, under any rule of law, statute or
constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers,
stockholders, officers and directors being released by the
holder or owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the
Mortgage.

     Pursuant to the Mortgage, the holder or owner of this
bond by his acceptance hereof is deemed to have agreed to
amendments to the Mortgage which will eventually permit
certain amendments to the Mortgage with the consent of the
holders of 66-2/3% of the principal amount of the
outstanding bonds of all series issued under the Mortgage
and which redefine, effective at such time as all bonds of
each series of bonds issued under the Mortgage prior to
January 1, 1977 are no longer outstanding, the amounts
required to be spent by the Company under the Mortgage for
the repair, maintenance, renewal and replacement of its
property.


                      [END OF FORM OF BOND]


  94
and

     Whereas, all things necessary to make the Bonds of the
Thirty-fifth Series and the Thirty-sixth Series, when
authenticated by the Trustee and issued as in the Indenture
provided, the valid, binding and legal obligations of the
Company, entitled in all respects to the security of the
Indenture, have been done and performed, and the creation,
execution and delivery of this Supplemental Indenture has in
all respects been duly authorized; and

     Whereas, the Company and the Trustee deem it advisable
to enter into this Supplemental Indenture for the purposes
above stated and for the purpose of describing the Bonds of
the Thirty-fifth Series and the Thirty-sixth Series, and of
providing the terms and conditions of redemption thereof;

     Now, therefore, this supplemental indenture witnesseth: 
That Southern Indiana Gas and Electric Company, in
consideration of the premises and of one dollar to it duly
paid by the Trustee at or before the ensealing and delivery
of these presents, the receipt whereof is hereby
acknowledged, and of the purchase and acceptance of the
bonds issued or to be issued hereunder by the holders or
registered owners thereof, and in order to secure the
payment of the principal, premium, if any, and interest of
all bonds at any time issued and outstanding under the
Indenture, according to their tenor and effect, and the
performance of all of the provisions hereof and of said
bonds, hath granted, bargained, sold, released, conveyed,
assigned, transferred, pledged, set over and confirmed and
by these presents doth grant, bargain, sell, release,
convey, assign, transfer, pledge, set over and confirm unto
Bankers Trust Company, as Trustee, and to its successor or
successors in said trust, and to its and their assigns
forever, all the properties of the Company located in the
State of Indiana described in Schedule A (which is
identified by the signature of an officer of each party
hereto at the end thereof) hereto annexed and hereby made a
part hereof and does hereby confirm that the Company will
not cause or consent to a partition, either voluntary or
through legal proceedings, of property, whether herein
described or heretofore or hereafter acquired, in which its
ownership shall be as a tenant in common, except as
permitted by and in conformity with the provisions of the
Indenture and particularly of Article X thereof.

     Together with all and singular the tenements,
hereditaments and appurtenances belonging or in any wise
appertaining to the aforesaid property or any party thereof,
with the reversion and reversions, remainder and remainders
and (subject to the provisions of Article X of the
Indenture), the tolls, rents, revenues, issues, earnings,
income, product and profits thereof, and all the estate,
right title interest and claim whatsoever, at law as well as
 95
in equity, which the Company now has or may hereafter
acquire in and to the aforesaid property and franchises and
every part and parcel thereof.

     To have and to hold all such properties, real, personal
and mixed, mortgaged, pledged or conveyed by the Company as
aforesaid, or intended so to be, unto the Trustee and its
successors and assigns forever.

     In trust, nevertheless, upon the terms and trusts of
the Indenture, for those who shall hold the bonds and
coupons issued and to be issued thereunder, or any of them,
without preference, priority or distinction as to lien of
any of said bonds and coupons over any others thereof by
reason of priority in the time of the issue or negotiation
thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged
coupons and claims for interest set forth in the Indenture
(and subject to any sinking funds that may be created for
the benefit of any particular series).

     Provided, however, and these presents are upon the
condition that, if the Company, its successors or assigns,
shall pay or cause to be paid, the principal of, premium, if
any, and interest on said bonds, at the times and in the
manner stipulated therein and herein, and shall keep,
perform and observe all and singular the covenants and
promises in said bonds and in the Indenture expressed to be
kept, performed and observed by or on the part of the
Company, then this Supplemental Indenture and the estate and
rights hereby granted shall cease, determine and be void,
otherwise to be and remain in full force and effect.

     It is hereby covenanted, declared and agreed, by the
Company, that all such bonds and coupons are to be issued,
authenticated and delivered, and that all property subject
or to become subject hereto is to be held, subject to the
further covenants, conditions, uses and trusts in the
Indenture set forth, and the Company, for itself and its
successors and assigns, does hereby covenant and agree to
and with the Trustee and its successor or successors in such
trust, for the benefit of those who shall hold said bonds
and interest coupons, or any of them, as follows:



 96
                             PART I.

                           DEFINITIONS

     The terms defined in this Part I shall, for all
purposes of this Supplemental Indenture, have the meanings
herein specified, unless the context otherwise requires:

Warrick County Bonds:

     The term "Warrick County Bonds", when used in
connection with the Bonds of the Thirty-fifth Series, shall
mean the Adjustable Rate Environmental Improvement Revenue
Bonds, 1993 Series A (Southern Indiana Gas and Electric
Company Project) issued under and pursuant to the applicable
County Indenture and, when used in connection with the Bonds
of the Thirty-Sixth Series, shall mean the Adjustable Rate
Environmental Improvement Revenue Bonds, 1993 Series B
(Southern Indiana Gas and Electric Company Project) issued
under and pursuant to the applicable County Indenture.

County Indenture:

     The term "County Indenture", when used in connection
with the Bonds of the Thirty-fifth Series, shall mean the
Indenture of Trust, dated as of May 1, 1993, by and between
Warrick County, Indiana and The Citizens National Bank of
Evansville, as Trustee, and any indenture supplemental
thereto or amendatory thereof, pursuant to which the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project) are issued and secured and, when used in connection
with the Bonds of the Thirty-Sixth Series, shall mean the
Indenture of Trust, dated as of May 1, 1993, by and between
Warrick County, Indiana and The Citizens National Bank of
Evansville, as Trustee, and any indenture supplemental
thereto or amendatory thereof, pursuant to which the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series B (Southern Indiana Gas and Electric Company
Project) Bonds are issued and secured.


County Trustee:

     The term "County Trustee", shall mean the person and/or
corporation acting as trustee at any time under the
applicable County Indenture.
 97
Loan Agreement:

     The term "Loan Agreement", when used in connection with
the Bonds of the Thirty-Fifth Series, shall mean the Loan
Agreement dated as of May 1, 1993 between Warrick County,
Indiana, a municipal corporation and political subdivision
of the State of Indiana, and the Company, relating to the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project), and any and all modifications, amendments and
Supplements thereof and, when used in connection with the
Bonds of the Thirty-Sixth Series, shall mean the Loan
Agreement dated as of May 1, 1993 between Warrick County,
Indiana, and the Company, relating to the Adjustable Rate
Environmental Improvement Revenue Bonds, 1993 Series B
(Southern Indiana Gas and Electric Company Project), and any
and all modifications, amendments and Supplements thereof.


                            PART II.

        DESCRIPTION OF BONDS OF THE THIRTY-FIFTH SERIES  

     Section 1.  Bonds of the Thirty-fifth Series shall
mature on the date set forth in the form of bond relating
thereto hereinbefore set forth, shall bear interest at the
rate from time to time borne by the Warrick County Bonds;
provided, however, that in no event shall the rate of
interest borne by the Bonds of the Thirty-fifth Series
exceed 10%.  Such interest, payable semi-annually, on May 1
and November 1 in each year, and all bonds of said series
shall be designated as hereinbefore in the sixth Whereas
clause set forth.  Both principal of and interest on said
bonds shall be payable, to the extent specified in the form
of bond hereinabove set forth, in any coin or currency of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts, at
the office or agency of the Company in the Borough of
Manhattan, The City of New York, N.Y.  Definitive bonds of
said series may be issued, originally or otherwise, only as
registered bonds without coupons; and they and the Trustee's
certificate of authentication shall be substantially in the
forms hereinbefore recited, respectively.  Definitive
registered bonds of the Thirty-fifth Series may be issued in
the denomination of $1,000 and in such other denominations
(in multiples of $1,000) as the Board of Directors of the
Company shall approve, and execution and delivery to the
Trustee for authentication shall be conclusive evidence of
such approval.  In the manner and upon payment of the
charges prescribed in the Indenture, registered bonds
without coupons of said series may be exchanged for a like
aggregate principal amount of fully registered bonds without
coupons of other authorized denominations of the same
series, upon presentation and surrender thereof for
 98
cancellation to the Trustee at its principal corporate trust
office in the Borough of Manhattan, The City of New York,
N.Y.  However, notwithstanding the provisions of Section 12
of the Indenture, no charge shall be made upon any transfer
or exchange of bonds of said series other than for any tax
or taxes or other governmental charge required to be paid by
the Company.  The form of the temporary bonds of said series
shall be in substantially the form of the form of registered
bond hereinbefore recited with such appropriate changes
therein as are required on account of the temporary nature
thereof.  Said temporary bonds of said series shall be in
registered form without coupons, registrable as to
principal, and shall be exchangeable for definitive bonds of
said series when prepared.

     The person in whose name any registered bond without
coupons of the Thirty-fifth Series is registered at the
close of business on any record date (as hereinbelow
defined) with respect to any interest payment date shall be
entitled to receive the interest payable on such interest
payment date notwithstanding the cancellation of such
registered bond upon any transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except if and to the extent the Company shall
default in the payment of the interest due on such interest
payment date, in which case such defaulted interest shall be
paid to the person in whose name such bond is registered
either at the close of business on the day preceding the
date of payment of such defaulted interest or on a
subsequent record date for such payment if one shall have
been established as hereinafter provided.  A subsequent
record date may be established by or on behalf of the
Company by notice mailed to the holders of bonds not less
than ten days preceding such record date, which record date
shall be not more than thirty days prior to the subsequent
interest payment date.  The term "record date" as used in
this Section with respect to any regular interest payment
date shall mean the April 15 or October 15, as the case may
be, next preceding such interest payment date, or, if such
April 15 or October 15 shall be a legal holiday or a day on
which banking institutions in the Borough of Manhattan, The
City of New York, N.Y., are authorized or obligated by law
to close, the next preceding day which shall not be a legal
holiday or day on which such institutions are so authorized
or obligated to close.

     Except as provided in this Section, every registered
bond without coupons of the Thirty-fifth Series shall be
dated and shall bear interest as provided in Section 10 of
the Indenture; provided, however, that so long  as there is
no existing default in the payment of interest on the bonds,
the holder of any bond authenticated by the Trustee between
the record date for any interest payment date and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
 99
have no claim against the Company with respect thereto; and
provided, further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the May 1 or November 1, as the case may be,
next preceding the date of such bond, to which interest has
been paid or, if the Company shall be in default with
respect to the interest due on November 1, 1993, then from
May 1, 1993.

     It is provided in the County Indenture that moneys on
deposit with the County Trustee for redemption of Warrick
County Bonds under certain circumstances shall be credited
to or used for the payment of principal or interest on the
Bonds of the Thirty-fifth Series.  The Company shall notify
the Trustee of all credits to or payments of principal
(whether at maturity, by redemption or by acceleration) and
interest on the Bonds of the Thirty-fifth Series by mailing
a statement to the Trustee on the date of such credit or
payment to the effect that such credit or payment has been
made, and further stating the extent to which the credit or
payment has been made on account of redemption of Warrick
County Bonds or from funds on deposit with the County
Trustee under the County Indenture.  In addition, the
Company shall promptly notify the Trustee of each change in
the interest rate borne by the Warrick County Bonds.


                            PART III.

        DESCRIPTION OF BONDS OF THE THIRTY-SIXTH SERIES  

     Section 1.  Bonds of the Thirty-sixth Series shall
mature on the date set forth in the form of bond relating
thereto hereinbefore set forth, shall bear interest at the
rate from time to time borne by the Warrick County Bonds;
provided, however, that in no event shall the rate of
interest borne by the Bonds of the Thirty-sixth Series
exceed 10%.  Such interest, payable semi-annually, on May 1
and November 1 in each year, and all bonds of said series
shall be designated as hereinbefore in the seventh Whereas
clause set forth.  Both principal of and interest on said
bonds shall be payable, to the extent specified in the form
of bond hereinabove set forth, in any coin or currency of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts, at
the office or agency of the Company in the Borough of
Manhattan, The City of New York, N.Y.  Definitive bonds of
said series may be issued, originally or otherwise, only as
registered bonds without coupons; and they and the Trustee's
certificate of authentication shall be substantially in the
forms hereinbefore recited, respectively.  Definitive
registered bonds of the Thirty-sixth Series may be issued in
the denomination of $1,000 and in such other denominations
 100
(in multiples of $1,000) as the Board of Directors of the
Company shall approve, and execution and delivery to the
Trustee for authentication shall be conclusive evidence of
such approval.  In the manner and upon payment of the
charges prescribed in the Indenture, registered bonds
without coupons of said series may be exchanged for a like
aggregate principal amount of fully registered bonds without
coupons of other authorized denominations of the same
series, upon presentation and surrender thereof for
cancellation to the Trustee at its principal corporate trust
office in the Borough of Manhattan, The City of New York,
N.Y.  However, notwithstanding the provisions of Section 12
of the Indenture, no charge shall be made upon any transfer
or exchange of bonds of said series other than for any tax
or taxes or other governmental charge required to be paid by
the Company.  The form of the temporary bonds of said series
shall be in substantially the form of the form of registered
bond hereinbefore recited with such appropriate changes
therein as are required on account of the temporary nature
thereof.  Said temporary bonds of said series shall be in
registered form without coupons, registrable as to
principal, and shall be exchangeable for definitive bonds of
said series when prepared.

     The person in whose name any registered bond without
coupons of the Thirty-sixth Series is registered at the
close of business on any record date (as hereinbelow
defined) with respect to any interest payment date shall be
entitled to receive the interest payable on such interest
payment date notwithstanding the cancellation of such
registered bond upon any transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except if and to the extent the Company shall
default in the payment of the interest due on such interest
payment date, in which case such defaulted interest shall be
paid to the person in whose name such bond is registered
either at the close of business on the day preceding the
date of payment of such defaulted interest or on a
subsequent record date for such payment if one shall have
been established as hereinafter provided.  A subsequent
record date may be established by or on behalf of the
Company by notice mailed to the holders of bonds not less
than ten days preceding such record date, which record date
shall be not more than thirty days prior to the subsequent
interest payment date.  The term "record date" as used in
this Section with respect to any regular interest payment
date shall mean the April 15 or October 15, as the case may
be, next preceding such interest payment date, or, if such
April 15 or October 15 shall be a legal holiday or a day on
which banking institutions in the Borough of Manhattan, The
City of New York, N.Y., are authorized or obligated by law
to close, the next preceding day which shall not be a legal
holiday or day on which such institutions are so authorized
or obligated to close.
 101
     Except as provided in this Section, every registered
bond without coupons of the Thirty-sixth Series shall be
dated and shall bear interest as provided in Section 10 of
the Indenture; provided, however, that so long  as there is
no existing default in the payment of interest on the bonds,
the holder of any bond authenticated by the Trustee between
the record date for any interest payment date and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
have no claim against the Company with respect thereto; and
provided, further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the May 1 or November 1, as the case may be,
next preceding the date of such bond, to which interest has
been paid or, if the Company shall be in default with
respect to the interest due on November 1, 1993, then from
May 1, 1993.

     It is provided in the County Indenture that moneys on
deposit with the County Trustee for redemption of Warrick
County Bonds under certain circumstances shall be credited
to or used for the payment of principal or interest on the
Bonds of the Thirty-sixth Series.  The Company shall notify
the Trustee of all credits to or payments of principal
(whether at maturity, by redemption or by acceleration) and
interest on the Bonds of the Thirty-sixth Series by mailing
a statement to the Trustee on the date of such credit or
payment to the effect that such credit or payment has been
made, and further stating the extent to which the credit or
payment has been made on account of redemption of Warrick
County Bonds or from funds on deposit with the County
Trustee under the County Indenture.  In addition, the
Company shall promptly notify the Trustee of each change in
the interest rate borne by the Warrick County Bonds.


                            PART IV.


            ISSUE OF BONDS OF THE THIRTY-FIFTH SERIES

     Section 1.  The principal amount of Bonds of the
Thirty-fifth Series which may be authenticated and delivered
hereunder is limited to the aggregate principal amount of
Twenty-two Million Two Hundred Thousand Dollars
($22,200,000).

     Section 2.  Bonds of the Thirty-fifth Series in the
aggregate principal amount of Twenty-two Million Two Hundred
Thousand Dollars ($22,200,000) may at any time subsequent to
the execution hereof be executed by the Company and
delivered to the Trustee and shall be authenticated by the
 102
Trustee and delivered (either before or after the recording
hereof) to the Company upon direction of the Company
evidenced by a writing or writings, signed by its President
or one of its Vice Presidents and its Treasurer or one of
its Assistant Treasurers, at such time or times as may be
requested by the Company upon the receipt by the Trustee of
the certificates, resolutions, opinions and other documents
required by the Indenture.

     Section 3.  The consideration for the Bonds of the
Thirty-fifth Series shall be the loan from Warrick County,
Indiana, provided for in Section 4.1 of the Loan Agreement,
which shall be deposited and disbursed pursuant to the Loan
Agreement.


                             PART V.

            ISSUE OF BONDS OF THE THIRTY-SIXTH SERIES

     Section 1.  The principal amount of Bonds of the
Thirty-sixth Series which may be authenticated and delivered
hereunder is limited to the aggregate principal amount of
Twenty-two Million Eight Hundred Thousand Dollars
($22,800,000).

     Section 2.  Bonds of the Thirty-sixth Series in the
aggregate principal amount of Twenty-two Million Eight
Hundred Thousand Dollars ($22,800,000) may at any time
subsequent to the execution hereof be executed by the
Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered (either before or
after the recording hereof) to the Company upon direction of
the Company evidenced by a writing or writings, signed by
its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers, at such time
or times as may be requested by the Company upon the receipt
by the Trustee of the certificates, resolutions, opinions
and other documents required by the Indenture.

     Section 3.  The consideration for the Bonds of the
Thirty-sixth Series shall be the loan from Warrick County,
Indiana, provided for in Section 4.1 of the Loan Agreement,
which shall be deposited and disbursed pursuant to the Loan
Agreement.




 103
                            PART VI.

                      REDEMPTION PROVISIONS

     Section 1.  The Bonds of the Thirty-fifth Series and
the Bonds of the Thirty-sixth Series shall be subject to
redemption by the Company prior to maturity, respectively,
in the events and in the manner and at the redemption prices
set forth in the respective forms of Bond of such series
contained in the eight and ninth Whereas clauses hereof and
not otherwise.

     Section 2.  In the manner provided by the provisions of
Article IX of the Indenture, notice of redemption shall be
mailed not less than thirty (30) and not more than forty-
five (45) days prior to the date of redemption, to the
registered owner of the Bonds of the Thirty-fifth Series or
of the Bonds of the Thirty-sixth Series, as the case may be,
at the address thereof as the same shall appear on the
transfer register of the Company; provided, however, that
the owners of all of the Bonds of the Thirty-fifth Series or
the owners of all of the Bonds of the Thirty-sixth Series
may agree in writing with the Company to a shorter notice
period with respect to their respective series, and such
agreement, if filed with the Trustee, shall be binding on
the Company.




                            PART VII.

                         MISCELLANEOUS 

     Section 1.  The Company covenants that the provisions
of Section 36A of the Indenture and of Section 1.02 of the
Supplemental Indenture dated as of July 1, 1948, which are
to remain in effect so long as any bonds of the series
referred to in said Section shall be outstanding under the
Indenture, shall remain in full force and effect so long as
any Bonds of the Thirty-fifth Series and any Bonds of the
Thirty-sixth Series shall be outstanding under the
Indenture.

     Section 2.  Except as herein otherwise expressly
provided, no duties, responsibilities or liabilities are
assumed, or shall be construed to be assumed, by the Trustee
by reason of this Supplemental Indenture, other than as set
forth in the Mortgage.  The Trustee shall not be responsible
for the recitals herein or in the bonds (except the
Trustee's certificate of authentication), all of which are
made by the Company solely.
 104
     Section 3.  As supplemented and amended by this
Supplemental Indenture, the Mortgage is in all respects
ratified and confirmed, and the Mortgage and this
Supplemental Indenture shall be read, taken and construed as
one and the same instrument.

     Section 4.  This Supplemental Indenture may be executed
in several counterparts and all such counterparts executed
and delivered, each as an original, shall constitute but one
and the same instrument.

 105
     In Witness Whereof, Southern Indiana Gas and Electric
Company, party of the first part hereto, and Bankers Trust
Company, party of the second part hereto, have caused these
presents to be executed in their respective names by their
respective Chairmen of the Board or Presidents or one of
their Vice Presidents or Assistant Vice Presidents and their
respective seals to be hereunto affixed and attested by
their respective Secretaries or one of their Assistant
Secretaries, all as of the day and year first above written.


(SEAL)                        SOUTHERN INDIANA GAS AND
                                ELECTRIC COMPANY,


                              By:  /s/ R.G. Reherman
                                    R.G. Reherman
                                   President and
                                  Chief Executive Officer
Attest:


/s/ A.E. Goebel
A.E. Goebel 
Senior Vice President, 
  Secretary and Treasurer



(SEAL)                             BANKERS TRUST COMPANY,


                                   By:  /s/ Samir Pandiri
                                        Samir Pandiri
                                    Assistant Vice President

Attest:


/s/ Shikha Dombek             
Shikha Dombek
Assistant Secretary

 106

STATE OF INDIANA         )
                         :    ss.:
COUNTY OF VANDERBURGH    )


     On this ____ day of May, 1993, before me, the
undersigned, a notary public in and for the county and state
aforesaid, personally came R.G. Reherman, to me known, who
being by me duly sworn, did depose and say that he resides
at 10881 Watershore Drive, Evansville, Indiana 47710; that
he is President and Chief Executive Officer of Southern
Indiana Gas and Electric Company, one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of the said corporation; that the
seal affixed to said instrument is such corporate seal; that
it was so affixed by order of the Board of Directors of said
corporation and that he signed his name thereto by like
order; and the said R.G. Reherman acknowledged the execution
of the foregoing instrument on behalf of the said
corporation as the voluntary act and deed of the said
corporation for the uses and purposes therein set forth.

     In Witness Whereof, I have hereunto set my hand and
seal the day and year first above written.



(SEAL)              _____________________________
                       Notary Public



My Commission Expires

My County of Residence is


 107

STATE OF NEW YORK   )
                    :    ss.:
COUNTY OF NEW YORK  )


     On this ____ day of May, 1993, before me, the
undersigned, a notary public in and for the county and state
aforesaid, personally came Samir Pandiri, to me known, who
being by me duly sworn, did depose and say that he resides
at 45 River Drive South, Jersey City, NJ  07310; that he is
an Assistant Vice President of Bankers Trust Company, one of
the corporations described in and which executed the
foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation and that he signed
his name thereto by like order; and the said Samir Pandiri,
acknowledged the execution of the foregoing instrument on
behalf of the said corporation as the voluntary act and deed
of the said corporation for the uses and purposes therein
set forth.

     In Witness Whereof, I have hereunto set my hand and
seal the day and year first above written.



(SEAL)              ___________________________________
                         Notary Public

 108
                               A-1

                           SCHEDULE A

          Detailed Description of Additional Properties


             Real Estate in Warrick County, Indiana

     Part of the East Half of the Northwest Quarter of
Section Fifteen (15), Township Seven (7) South, Range Eight
(8) West, in Warrick County, Indiana, more fully described
in deed dated January 14, 1985 from Old National Bank in
Evansville, Indiana, recorded in the office of the Recorder
of Warrick County, Indiana, in Deed File No. 2, Card Number
15148.



                    Signed for identification



                    /s/ A.E. Goebel                       
                    A.E. Goebel, Senior Vice President,
                         Secretary and Treasurer
                    SOUTHERN INDIANA GAS AND ELECTRIC
                      COMPANY



                    /s/ Samir Pandiri                     
                    Samir Pandiri, Assistant Vice President
                    BANKERS TRUST COMPANY




EX-10.20
4
MATERIAL CONTRACTS


 110
          SOUTHERN INDIANA GAS & ELECTRIC COMPANY
           CORPORATE PERFORMANCE INCENTIVE PLAN
                     FEBRUARY 1994


I.    PURPOSE OF THE OUTLINE

      *   To highlight the annual corporate performance
          incentive plan approved for the period January
          1994 - December 1996, subject to annual review by
          the compensation committee of the Board of
          Directors.

      *   To review the objectives and key features of the
          plan.

II.   PLAN OBJECTIVES

      *   To motivate and reward outstanding performance by
          SIGECO and its executive team.

      *   To compare SIGECO's performance with a group of
          regional utilities.

      *   To focus on stockholder and rate payer interests.

      *   To support long-term objectives by achieving
          short-term goals.

III.  KEY FEATURES OF THE PLAN

      *   Participation limited to officers, management
          staff, and other selected management positions.

      *   Incentive awards determined primarily by
          corporate results:

          -  Five measures of Company performance.
          -  Results for annual and multi-year periods
             compared to ten other utilities.

      *   Payments of awards in cash.

      *   Levels of award opportunities established to
          reflect organizational level of responsibility
          and impact on company performance for each
          position.

      *   Opportunity for the Chief Executive Officer to
          adjust individual awards by +/- 5% based on his
          judgment of the participants' base salaries
          during the plan year.

      *   Award levels stated as percentage of
          participants' basic salaries during the plan
          year.

      *   Maximum annual incentive plan fund limited to
          1.5% of net income.
 111
IV.   PARTICIPATION AND INCENTIVE AWARD LEVELS

      *   A review of SIGECO's organization structure
          suggests that eligibility for plan participation
          should be limited to officer and key management
          positions per the following categories:


                                  RANGE OF AWARD OPPORTUNITIES
INCENTIVE                                         (% OF BASE SALARY)
CATEGORY       POSITION                         THRESHOLD     MAXIMUM

                                                          
   I.     Chairman and Chief Executive Officer      20%         30%

  II.     Sr. Vice President-Operations             15%         25%
          Sr. Vice President-Secretary & Treasurer

 III.     All Other Plan Participants               10%         20%


V.    INCENTIVE PLAN FUNDING

      *   The size of the incentive fund will be determined
          each plan year by five measures of Company
          performance compared with the performance of ten
          utilities.

      *   Measures to be used are shown below.  Different
          measures may be appropriate in subsequent plan
          years based on Company objectives and priorities.



PERFORMANCE MEASURES                           BASIS FOR COMPARISON
                                            
Shareholder Related

1. Ratio of market to book value               Fiscal year end - highest

2. Total shareholder return on common stock    Five-year total return -
                                               highest

Customer Related

1. Revenue per kilowatt hour                   Annual average - lowest

2. Revenue per Mcf                             Annual average - lowest

3. Total operating expenses per customer       Average annual growth rate
                                               over a three year period -
                                               lowest

 112
VI.   COMPARISON OF RESULTS FOR PLAN YEAR

      *   SIGECO's results for the five performance
          measures will be compared to the performance of
          10 utilities:  8 combination companies (primarily
          located in the midwest), 1 electric and 1
          gas company (both located in Indiana).



COMPARISON COMPANIES
       
      *   Indiana Energy               *   Louisville Gas & Electric
      *   Indianapolis Power & Light   *   Northwestern Public Service
      *   Interstate Power             *   Orange & Rockland Utilities
      *   Iowa-Illinois Gas & Electric *   Wisconsin Power & Light
      *   Madison Gas & Electric       *   Wisconsin Public Service


      *   Comparing SIGECO's performance to other   
          utilities:

          -  provides an objective measure from the
          standpoint of the Company's external publics,

          -  encourages management to out-perform similar
          utilities,

          -  reduces the influence of factors beyond
          management's control, such as general economic
          and utility industry conditions.

      *   At the end of the plan year, the performance
          scale shown below is used to evaluate SIGECO's
          performance for each of the measures selected,
          compared with the utility group.



      PERFORMANCE LEVEL                    PERFORMANCE RATING    RANKING
                                                                 POINTS
                                                              
      Equals or exceeds nine companies     Outstanding              20
      in the comparison group

      Equals or exceeds seven companies    Superior                 15
      in the comparison group

      Equals or exceeds five companies in  Satisfactory             10
      the comparison group

      Falls below the fifth highest        Below Standard            0
      company in the comparison group

 113



              PERFORMANCE RATING         TOTAL POINTS
                                        
                 Outstanding               90 - 100

                 Superior                  70 - 89

                 Satisfactory              50 - 69

                 Below Standard            Below 50

      *   The Chairman and Chief Executive Officer's award
          will be established directly from the performance
          rating of SIGECO against the comparison
          companies.

      *   The Chairman will have the latitude to adjust the
          indicated awards for other participating
          executives by +/- 5%, based on his evaluation of
          their individual contributions during the plan
          year.

VII.  SUMMARY OF STEPS TO DETERMINE AWARDS

      *   Corporate results are calculated for each
          performance measure used.

      *   SIGECO's results are ranked in relation to the
          comparison group of utilities and the total
          incentive award is determined.  This total may
          not exceed 1.5% of SIGECO's net income for the
          plan year.

      *   The indicated award for the other participants
          may be adjusted by +/- 5% by the CEO on the basis
          of individual performance during the plan year,
          but total fund dollars available may not be
          exceeded.

      *   Recommended awards are reviewed and approved by
          the Compensation Committee and the Board of
          Directors.
 114
VIII. COMPENSATION COMMITTEE RESPONSIBILITIES

      *   The Compensation Committee has responsibility for
          approving the plan and assuring that it meets
          SIGECO's objectives.  The Committee's specific
          responsibilities include:

          1.  Approving corporate performance measures, the
              measurement scale used, and the comparison
              utilities selected.

          2.  Reviewing eligibility for plan participation.

          3.  Approving the size of the total incentive
              fund and individual levels of award
              opportunities.

          4.  Reviewing and approving the recommended
              awards for participants.




EX-12
5
COMP OF RATIOS


 55
EX-12

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                   For the Five Years Ended December 31, 1993


                            1993       1992     1991      1990      1989
                                          (in thousands)
EARNINGS AS DEFINED
                                                   
Net income                $39,653    $36,767  $38,513   $37,691   $36,216
Add:
  Income Taxes:
    Current:
       Federal              5,897     13,049   14,176    12,025    13,404 
       State                1,312      2,444    2,436     1,642     2,116 
    Deferred, net:
       Federal              9,682        550    2,996     5,597     5,496 
       State                1,581        439      690     1,532       823 
    Deferred investment
     tax credit, net       (1,868)    (1,873)  (1,877)   (1,883)   (1,878)
  Interest on long-term
   debt                    18,437     17,768   18,238    18,249    18,102 
  Amortization of premium,
   discount and expense
   on debt                    773        446      740       667       714 
  Other interest              746        461      719       572     2,173 
  Interest component of
   rent expense           405        391      382       369       351 

    Earnings as defined   $76,618    $70,442  $77,013   $76,461   $77,517 

FIXED CHARGES AS DEFINED

  Interest on long-term
   debt                   $18,437    $17,768  $18,238   $18,249   $18,102 
  Amortization of premium,
   discount and expense
   on debt                    773        446      740       667       714 
  Other interest              746        461      719       572     2,173 
  Interest component of
   rent expense           405        391      382       369       351 

    Fixed charges as
     defined              $20,361    $19,066  $20,079   $19,857   $21,340 

Ratio of Earnings to
 Fixed Charges 
NOTES:
   One-third of rentals represents a reasonable
approximation of the interest factor.
   The ratios shown above do not reflect the fixed
charge component in the Company's power contract with OVEC
(see "Electric Business", page 1).  Inclusion of the
component in the computation would not have a significant
effect on the ratios.






EX-21
6
SUBSIDIARIES OF REGISTRANT


 56
EX-21

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                          SUBSIDIARY OF THE REGISTRANT


              Southern Indiana Properties, Incorporated in Indiana





EX-24
7
POWER OF ATTORNEY


 60
                              February 15, 1994



Mr. R. G. Reherman
Mr. A. E. Goebel
Southern Indiana Gas and Electric Company
29 N.W. Fourth Street
Evansville, Indiana 47741

J. H. Byington, Jr., Esq.
Winthrop, Stimson, Putnam & Roberts
40 Wall Street
New York, New York 10005


Dear Gentlemen:

    Southern Indiana Gas and Electric Company will file an
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 ("Form 10-K") before April 1, 1994 which
will be accompanied by certain exhibits.

    We hereby authorize you, or any one of your, to
complete said Form 10-K and to remedy any deficiencies with
respect to said Form 10-K by appropriate amendment or
amendments; and we hereby make, constitute and appoint each
of you our true and lawful attorney for each of us and in
each of our names, places and steads, both in our individual
capacities as directors and that of officers of Southern
Indiana Gas and Electric Company, to sign and cause to be
filed with the Securities and Exchange Commission said Form
10-K, any appropriate amendment or amendments thereto, and
any exhibits thereto.

    The undersigned, Southern Indiana Gas and Electric
Company, also authorizes you and any one of you to sign said
 61
Form 10-K and any amendment or amendments thereto on its
behalf as attorney-in-fact for its respective officers, and
to file the same as aforesaid together with exhibits.

                   Very truly yours,

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                   By  ( R. G. Reherman )
                    R. G. Reherman, Chairman, President and
                        Chief Executive Officer


(Melvin H. Dodson)            (R. W. Shymanski)
Melvin H. Dodson              Richard W. Shymanski


(Walter R. Emge)              (Donald E. Smith)
Walter R. Emge                Donald E. Smith


(Robert L. Koch II)           (James S. Vinson)
Robert L. Koch II             James S. Vinson


(Jerry A. Lamb)               (N. P. Wagner)
Jerry A. Lamb                 N. P. Wagner


(Donald A. Rausch)            (A. E. Goebel)
Donald A. Rausch              A. E. Goebel


(Ronald G. Reherman)          (S. M. Kerney)
Ronald G. Reherman            S. M. Kerney


(John H. Schroeder)
John H. Schroeder

   



-----END PRIVACY-ENHANCED MESSAGE-----

EX-3

 63
                         BY-LAWS

           SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

             AS AMENDED THROUGH SEPTEMBER 22, 1993


ARTICLE I:  LOCATION OF OFFICES

     Section 1 - Principal Office:  The principal office of
     the corporation shall be at 20-24 N. W. Fourth Street,
     Evansville, Vanderburgh County, Indiana.

     Section 2 - Other Offices:  The corporation may have
     and maintain such other offices as the Board of
     Directors may deem expedient.

ARTICLE II:  CORPORATE SEAL

     The corporation shall have a corporate seal with the
     name of the corporation and the words "Evansville,
     Indiana" inscribed about a circle and the words
     "Incorporated, 1912" within such circle.

ARTICLE III:  FISCAL YEAR

     The fiscal year of the corporation shall begin on the
     first day of January and end on the thirty-first day of
     December of each year.

ARTICLE IV:  SHAREHOLDERS' MEETINGS

     Section 1 - Place of Meetings:  All meetings of the
     shareholders shall be held at the principal office of
     the corporation, except such meetings as the Board of
     Directors by resolution determine shall be held
     elsewhere, in which case meetings may be held upon
     notice, as hereinafter provided, at such place or
     places within or without the State of Indiana as the
     Board of Directors may determine.

     Section 2 - Annual Meeting:  The annual meeting of the
     shareholders shall be held at 3:00 o'clock P.M. on the
     fourth Tuesday of March in each year, or on such other
     date or time as may be fixed by the Board of Directors
     and stated in the notice of the meeting, provided such
     annual meeting shall be held in any event within five
     (5) months after the close of the fiscal year of the
     corporation for the election of Directors and the
     transaction of such other business as may properly come
     before the meeting.

     Section 3 - Special Meetings:  Except as otherwise
     required by law and subject to the rights of any class
     or series of stock having a preference over the common
     stock as to dividends or upon liquidation, a special
 64
     meeting of the shareholders of the corporation may be
     called by the Board of Directors, the Chairman of the
     Board or the Chief Executive Officer, or by the
     Secretary upon the request in writing of the holders of
     not less than seventy percent (70%) of the voting stock
     of the corporation.

     Section 4 - Notices:  At least ten (10) days before any
     meeting of shareholders written or printed notice
     stating the place, day and hour of the meeting and, in
     case of a special meeting or when required by law or by
     the Amended Articles of Incorporation, the purpose or
     purposes for which the meeting is called, shall be
     delivered or mailed by the Secretary or by the officers
     or persons calling the meeting to each shareholder of
     record entitled by law, these By-Laws or the Amended
     Articles of Incorporation to vote at such meeting, at
     such address as appears on the records of the
     corporation.  Notice of any shareholders' meeting may
     be waived in writing by any shareholder if the waiver
     sets forth in reasonable detail the purpose or purposes
     for which the meeting is called and the time and place
     thereof.  Attendance at any meeting in person or by
     proxy when the instrument of proxy sets forth in
     reasonable detail the purpose or purposes for which the
     meeting is called, shall constitute a waiver of notice
     of such meeting.  No notice of the holding of an
     adjourned meeting shall be necessary.  Each shareholder
     who has, in the manner above provided, waived notice of
     a shareholders' meeting or who personally attends a
     shareholders' meeting or is represented thereat by a
     proxy authorized to appear by an instrument of proxy
     complying with the requirements above set forth, shall
     be conclusively presumed to have been given due notice
     of such meeting.

     Section 5 - Quorum:  Subject to the provisions of the
     Amended Articles of Incorporation, at any meeting of
     the shareholders one-third (1/3) of the shares of the
     outstanding capital stock represented in person or by
     proxy shall constitute a quorum for the transaction of
     business, but a lesser number may convene and adjourn.

     Section 6 - Voting:  Shareholders entitled by law,
     these ByLaws or the Amended Articles of Incorporation
     to vote at any meeting of shareholders may vote either
     in person or by proxy executed in writing by the
     shareholder or a duly authorized attorney-in-fact.  No
     proxy shall be valid after eleven (11) months from the
     date of its execution unless a longer time is expressly
     provided therein. At all meetings of the shareholders
     the holder of each share of the preferred stock $100.00
     par value and of the common stock shall be entitled to
     one (1) vote for each share of such stock standing in
     his name on the books of the corporation and the holder
     of each share of the preferred stock, no par value,
     shall be entitled to a fraction of one (l) vote per
     share, which fraction shall be equal to the ratio of
 65
     the involuntary liquidation value of such share to
     $100.00, upon all questions; and a majority of the
     votes cast at any such meeting shall be sufficient for
     the adoption or rejection of any question presented
     unless otherwise provided by law or by the Amended
     Articles of Incorporation.  No shareholder shall have
     cumulative voting rights in connection with the
     election of Directors.

     No share shall be voted at any meeting:

     (1)  Upon which any installment is due and unpaid, or

     (2)  Which belongs to the corporation.

     For the purpose of determining shareholders entitled to
     vote at any meeting of the shareholders or any
     adjournment thereof or shareholders entitled to receive
     payment of any dividend or in order to make a
     determination of shareholders for any other purpose,
     only those shareholders who are shareholders of record
     on the record date fixed by the Board of Directors or
     as provided in Article XI, Section 2 hereof, shall be
     entitled to vote.  Any shareholder acquiring title to
     shares of stock after said record date shall, upon
     written request to the shareholder of record, be
     entitled to receive a proxy from such shareholder with
     power of substitution to vote such stock.

     Shares standing in the name of a corporation (other
     than Southern Indiana Gas and Electric Company) may be
     voted by such officers, agents or proxy as the Board of
     Directors of such corporation may appoint.  Shares held
     by fiduciaries may be voted by the fiduciaries in such
     manner as the instrument or order appointing such
     fiduciaries may direct.  In the absence of any such
     direction or the inability of the fiduciaries to act in
     accordance therewith, shares held jointly by three (3)
     or more fiduciaries shall be voted in accordance with
     the will of the majority.  Where the fiduciaries or a
     majority of them cannot agree or where they are equally
     divided upon the questions of voting such shares, any
     court of general equity jurisdiction may, upon petition
     filed by any of such fiduciaries or by any party in
     interest, direct the voting of such shares as it may
     deem for the best interests of the beneficiaries and
     such shares shall be voted in accordance with such
     direction.  Shares that are pledged may, unless
     otherwise provided in the agreement of pledge, be voted
     by the shareholder pledging the same until the shares
     have been transferred to the pledgee on the books of
     the corporation and thereafter they may be voted by the
     pledgee.

     Section 7 - Voting Lists:  At least five (5) days
     before each election of Directors, the officer or agent
     having charge of the stock transfer books shall make a
 66
     complete list of the shareholders, arranged in
     alphabetical order, with the address and number of
     shares and votes held by each, which list shall be on
     file at the principal office of the company and subject
     to inspection by any shareholder.  Such list shall be
     produced and kept open at the time and place of
     election and subject to the inspection of any
     shareholder during the holding of such election.  The
     original stock register or transfer books, or
     duplicates thereof kept in the State of Indiana, shall
     be the only evidence as to who are the shareholders
     entitled to examine such list or the stock ledger or
     transfer book or to vote at any meeting of the
     shareholders.

ARTICLE V:  DIRECTORS

     Section 1 - Number:  The Board of Directors of this
     corporation shall consist of eleven (11) members.

     Section 2 - Classes:  The Board of Directors shall be
     and is divided into three (3) Classes - Class I, Class
     II and Class III - which will be as nearly equal in
     number as possible.  No Class shall include less than
     three (3) Directors.

     Section 3 - Election:  At the annual meeting of
     shareholders during which the members of the Board of
     Directors are initially divided into the above
     described Classes by appropriate amendment of the
     Amended Articles of Incorporation of the corporation,
     those Directors who are assigned to Class I shall be
     elected for one-year terms, those assigned to Class II
     shall be elected for two-year terms and those assigned
     to Class III shall be elected for three-year terms.  At
     each succeeding annual meeting of the shareholders, an
     election of Directors of the corporation shall be held
     for the Class of Directors whose terms of office expire
     at such time.  In the event of a failure to hold an
     annual meeting of the shareholders or to conduct an
     election of Directors at any annual meeting of
     shareholders which-is held, the Directors to be elected
     at such meeting may be elected at any special meeting
     of the shareholders called for that purpose.  At any
     election of Directors, the Chairman of the Board, if
     presiding, or the Chief Executive Officer, if other
     than the Chairman of the Board, may appoint inspectors
     or judges who shall report to the meeting upon the
     validity of all proxies received, count the votes cast
     and make a report thereof at such meeting.

     Section 4 - Term of Office, Qualification and
     Retirement: 

     A.   With Respect to Each Director Elected Prior to
          July 23, 1985, except for each initial Director in
          Class I and Class II who shall serve for the
          respective terms designated in the preceding
          Section 3, each such Director shall serve for a
          term ending on the date of the third annual
          meeting of shareholders following the annual
 67    
          meeting at which such Director was elected;
          provided, however, that any Director who arrives
          at the age of seventy-two (72) years subsequent to
          January 1, 1991, shall tender his resignation to
          become effective at the end of the calendar year
          prior to the year of expiration of the term during
          which the Director attains his seventy-second
          (72nd) birthday, and his successor shall be chosen
          in accordance with the provisions of Section 5 of
          this Article V.

     B.   With Respect to Each Director Elected After July
          22, 1985, each such Director shall serve for a
          term ending on the date of the third annual
          meeting of shareholders following the annual
          meeting at which such Director was elected;
          provided, however, that any such Director who
          arrives at the age of seventy (70) years during
          his elected term shall tender his resignation to
          become effective at the end of the calendar year
          during which he attains his seventieth (70th)
          birthday, and his successor shall be chosen in
          accordance with the provisions of Section 5 of
          this Article V.

     C.   By invitation of the Board of Directors, board
          members who have held the position of Chairman of
          the Board or Chief Executive Officer of the
          Company may, upon retirement from the Board of
          Directors, be elected, on an annual basis, to
          serve in the capacity of an advisory board member. 
          Advisory board members are entitled to receive the
          annual stipend portion of the regularly
          established directors compensation then in effect
          pursuant to Section 7 of this Article V; however,
          they shall not enjoy voting privileges. 
          Furthermore, advisory board members shall not
          receive regular committee assignments, but may,
          from time to time, be called for committee service
          for which they will be compensated at the
          established per meeting fee.

     Section 5 - Vacancies:  Each Director shall serve until
     his successor is elected and qualified or until his
     death, retirement, resignation or removal.  Should a
     vacancy occur or be created, whether arising through
     the death, resignation or removal of a Director or
     through an increase in the number of Directors, such
     vacancy shall be filled by a majority vote of the
     remaining Directors of all Classes of the Board of
     Directors or, at the discretion of the Board of
     Directors, such vacancy may be filled by vote of the
     shareholders at a special meeting called for that
     purpose.  A Director so elected to fill a vacancy shall
     serve for the remainder of the then-present term of
     office of the Class to which such Director was elected.
 68
     Section 6  - Removal:  Any Director, or the entire
     Board of Directors, may be removed; provided, however,
     that such removal must be for cause and must be
     approved in accordance with provisions of this Section
     6.  Removal for cause must be approved by at least
     seventy percent (70%) of the combined voting power of
     the outstanding shares of stock of the corporation then
     entitled to be voted at an election for that Director,
     voting together as a single Class, and the action for
     removal must be brought within three (3) years of the
     occurrence of such cause.

     Section 7 - Compensation:  The Directors shall receive
     such compensation for their service as Directors and as
     members of any committee appointed by the Board as may
     be prescribed by the Board of Directors.  The Directors
     shall also be reimbursed for ordinary and reasonable
     expenses incurred in the performance of their duties. 
     No such payment shall preclude any Director from
     serving the corporation in any other capacity and
     receiving compensation therefor.

ARTICLE VI:  DIRECTORS' MEETINGS

     Section 1 - Regular Meetings:  Regular meetings of the
     Board of Directors shall be held at the principal
     office of the corporation on the third Tuesday of each
     month at 10:00 o'clock A.M., or on such other day of
     the month, time of the day or place, within or without
     the State, as the Board of Directors may designate.

     Section 2 - Special Meetings:  Special meetings of the
     Board of Directors may be held at any time at the
     principal office of the corporation or elsewhere within
     or without the State as shall be specified in the
     notice of such meeting.

     The Secretary shall call a special meeting whenever and
     wherever so requested by the Chairman of the Board, the
     Chief Executive Officer or any three (3) Directors.

     Section 3 - Organization Meeting:  Immediately
     following the meeting of the shareholders at which the
     members of any Class of Directors are elected, the
     members of all Classes of the Board of Directors shall
     meet and organize and transact such other business as
     may properly be presented at such meeting.

     Section 4 - Notice:  No notice shall be required for a
     regular meeting of the Board of Directors or of an
     adjourned meeting.  A reasonable notice of special
     meetings, in writing or otherwise, shall be given to
     each Director or sent to his residence or place of
     business.  Notice of a special meeting shall specify
     the time and place of holding the meeting.  Unless
     otherwise stated in the notice thereof, any and all
     business may be transacted at a special meeting of the
 69
     Board of Directors.  No notice shall be required to be
     given to any Director who signs a written waiver of
     notice before the meeting, at the time of the meeting
     or at any time thereafter.

     Section 5 - Quorum:  At all meetings of the Board of
     Directors a majority of the whole Board shall be
     necessary to constitute a quorum for the transaction of
     any business except the filling of vacancies, but a
     lesser number may convene and adjourn.

     Section 6 - Voting:  All questions coming before any
     meeting of the Board of Directors for action shall be
     decided by a majority vote of all Classes of the Board
     of Directors present at such meeting unless otherwise
     provided by law, the Amended Articles of Incorporation
     or the other provisions of these By-Laws.

ARTICLE VII:  EXECUTIVE COMMITTEE

     Section 1 - Number, Qualification, Appointment,
     Alternates:  The Board of Directors shall appoint not
     less than two (2) Directors who, together with the
     Chairman of the Board and the Chief Executive Officer
     (if other than the Chairman), shall constitute the
     Executive Committee.  The Board of Directors in its
     discretion may also appoint one (1) or more Directors
     as alternate members of the Executive Committee to
     serve in place of any regular member of the Executive
     Committee (other than the Chairman of the Board or the
     Chief Executive Officer) during any period of time when
     such regular member is unavailable as a member of the
     Executive Committee on account of illness, absence or
     otherwise.  The Chief Executive Officer of the
     corporation shall serve as Chairman of the Executive
     Committee.

     Section 2 - Powers and Duties:  The Executive Committee
     shall have and exercise all the authority of the entire
     Board of Directors when the Board is not in session
     with respect to all matters except the following:

     (1)  Amending the Amended Articles of Incorporation;

     (2)  Adopting an Agreement or a Plan of Merger,
          Consolidation or other "Business Combination" as
          that term is defined in Article XI of the Amended
          Articles of Incorporation;

     (3)  Proposing a special corporate transaction such as
          the sale, lease, exchange, mortgage, pledge or
          disposition of all fixed assets of the
          corporation; or

     (4)  Terminating, winding up and/or changing the nature
          of the corporation's business.
 70 
     Section 3 - Term of Office:  The members of the
     Executive Committee shall hold office from the date of
     their appointment until the next succeeding
     organization meeting of the Directors, provided that
     the Board of Directors shall at all times have the
     power to remove any member of the Executive Committee.

     Section 4 - Vacancies:  Any vacancy or vacancies in the
     Executive Committee arising from any cause shall be
     filled by the remaining Directors.

     Section 5 - Fees:  Members of the Executive Committee,
     as such, shall not receive any stated salary for their
     services, but expenses of attendance, if any, and a fee
     in such an amount as may be determined by the Board of
     Directors from time to time shall be paid for
     attendance at each Executive Committee meeting.

     Section 6 - Meetings:  The Executive Committee shall
     meet at such times and places as the Chairman of the
     Board or Chief Executive Officer or a majority of the
     Committee members may designate, provided that
     reasonable notice of such meeting shall be given each
     member.  A majority of the Executive Committee shall
     constitute a quorum for the transaction of all
     business.

     Section 7 - Minutes:  The Executive Committee shall
     keep minutes of all its meetings which shall be
     recorded in the minute book of the corporation and
     shall be promptly submitted to the Board of Directors
     for approval.

ARTICLE VIII:  AUDIT COMMITTEE

     The Board of Directors shall appoint an Audit Committee
     consisting of not less than three (3) nor more than
     five (5) members of the Board of Directors, none of
     whom shall be an officer of the corporation.  Each
     member of the Audit Committee shall receive a fee fixed
     by the Board of Directors for attendance at each
     meeting of the Audit Committee.

ARTICLE IX:  OFFICERS

     Section 1 - Titles:  The mandatory officers of the
     corporation shall consist of a Chairman of the Board, a
     President, a Secretary and a Treasurer.  In addition,
     the Chairman of the Board or the President shall be
     elected by the Board of Directors to be Chief Executive
     Officer of the corporation.  In the event of a vacancy
     in the office of Chief Executive Officer, or the
     absence or disability of the officer serving in such
     capacity, then the other officer eligible to be elected
     to such office (if not one and the same person) shall
     perform the duties of Chief Executive Officer.  The
 71 
     Board of Directors may elect, at the request of the
     Chief Executive Officer, one (1) or more Executive Vice
     Presidents, one (1) or more Senior Vice-Presidents, one
     (1) or more Vice-Presidents, one (1) Controller, one
     (1) or more Assistant Controllers, one (1) or more
     Assistant Secretaries, one (1) or more Assistant
     Treasurers, Assistant or Assistants to the President or
     any Executive Vice-President or Vice-President.

     The Board of Directors may designate the President or
     any Vice President as the Chief Operating Officer of
     the Corporation and may designate any Vice President or
     the Secretary or the Treasurer as the Chief Financial
     Officer of the Corporation.

     Section 2 - Qualifications of the Chairman of the Board
     and President:  The Chairman of the Board and the
     President shall be chosen from among the members of the
     Board of Directors.

     Section 3 - Election of Officers:  The mandatory
     officers of the corporation shall be elected annually
     at the organization meeting of the Board of Directors. 
     Any other officers not so elected at such meeting may
     be elected subsequently at any regular or special
     meeting of the Board.

     Section 4 - Term of Office Qualification and
     Retirement:  All officers shall serve at the pleasure
     of the Board and shall hold office from the date of
     their election until the next succeeding annual
     organization meeting of the Board of Directors or until
     their successors are elected and shall qualify;
     provided, however, that any officer, except those
     having attained age 64 as of January 1, 1989, shall
     tender his resignation to become effective at the end
     of the calendar month during which the officer attains
     his sixty-fifth (65th) birthday.

     Section 5 - Vacancies:  Any vacancy or vacancies among
     the officers arising from any cause may be filled by
     the Board of Directors.

     Section 6 - Compensation of Officers:  The Board of
     Directors shall fix the compensation of the Chief
     Executive Officer, the President, the Chief Operating
     Officer, the Chief Financial Officer and the Chairman
     of the Board, when said Chairman is also serving as an
     active employee of the Company.  The compensation of
     all other officers shall be fixed by the Chief
     Executive Officer.

     Section 7 - Combining Offices:  Any two (2) or more
     offices may be held by the same person except that the
     duties of President and Secretary shall not be
     performed by the same person. 
 72
ARTICLE X:  POWERS AND DUTIES OF DIRECTORS AND OFFICERS

     Section 1 - Directors:  The business and affairs of the
     corporation shall be managed by the Board of Directors,
     except where specifically excepted by law, the Amended
     Articles of Incorporation or the other provisions of
     these By-Laws.

     Section 2 - Chairman of the Board:  The Chairman of the
     Board shall preside at all meetings of the Board of
     Directors and at all meetings of shareholders and shall
     in general perform all duties incident to the office of
     Chairman of the Board and such other duties as may be
     assigned to him from time to time by the Board of
     Directors.  The Chairman of the Board when acting as
     the Chief Executive Officer shall also exercise the
     duties set forth in Section 3 of this Article X.

     Section 3 - Chief Executive Officer:  The Chief
     Executive Officer of the corporation shall have the
     general control and management of its business and
     affairs subject to the control of the Board of
     Directors.

     Section 4 - President:  The President shall perform all
     duties as may be assigned to him from time to time by
     the Chief Executive Officer (if other than the
     President) or by the Board of Directors.  The President
     when acting as the Chief Executive Officer of the
     corporation shall also exercise the duties set forth in
     Section 3 of this Article X.

     Section 5 - Vice-Presidents:  The Executive, Senior or
     other Vice-Presidents shall have such responsibilities
     and perform such duties as may be respectively assigned
     to them from time to time by the Board of Directors,
     the Executive Committee or the Chief Executive Officer. 
     In the absence or disability of the President, an
     Executive Vice-President or a Senior Vice-President may
     be designated by the Board of Directors or Executive
     Committee to perform and exercise all of the powers of
     the President.

     Section 6 - Secretary:  The Secretary shall have the
     custody of the corporate seal and records of the
     corporation and be in charge of all the records and
     accounts of the corporation.  He shall act as Secretary
     at meetings of the shareholders, Directors and
     Executive Committee and enter the minutes of such
     meetings in a book provided for that purpose and shall
     attend to publishing, giving and serving all official
     notices of the corporation.  He shall perform such
     other duties as may be assigned to him.

     Section 7 - Assistant Secretaries:  In the absence or
     disability of the Secretary, the Assistant Secretaries
     shall act with all the powers of the Secretary.  They
     shall perform such other duties as may be assigned to
     them.
 73
     Section 8 - Treasurer:  The Treasurer shall have the
     custody of all negotiable instruments and securities of
     the corporation and be in charge of collection of
     amounts due the corporation.  He shall disburse the
     funds of the corporation only by check upon properly
     authorized vouchers and shall keep a record of all
     receipts and disbursements by him.  He shall have
     authority to give receipts for moneys paid to the
     corporation and to endorse checks, drafts and other
     instruments for the payment of money for deposit or
     collection where necessary or proper and to deposit the
     same to the credit of the corporation in such bank or
     banks or depositary as the Board of Directors or the
     Executive Committee may designate and he may endorse
     all commercial documents requiring endorsements for or
     on behalf of the corporation.  He shall perform such
     other duties as may be assigned to him.

     Section 9 - Assistant Treasurers:  In the absence or
     disability of the Treasurer, the Assistant Treasurers
     shall act with all the powers of the Treasurer.  They
     shall perform such other duties as may be assigned to
     them.

     Section 10 - Controller:  The Controller shall have
     general supervision of the accounting of the
     corporation including the preparation of all pertinent
     accounting reports.  He shall perform such other duties
     as may be assigned to him.  In the event that a
     Controller has not been elected by the Board of
     Directors, the powers and duties of the Controller
     shall be assigned to the Treasurer.

     Section 11 - Assistant Controllers:  In the absence or
     disability of the Controller, the Assistant Controllers
     shall act with all the powers of the Controller.  They
     shall perform such other duties as may be assigned to
     them.

ARTICLE XI:  STOCK

     Section 1 - Stock Certificates:  Each shareholder shall
     be entitled to a certificate signed by the President or
     a VicePresident and the Secretary or an Assistant
     Secretary of the corporation and sealed with the
     corporate seal of the corporation, certifying to the
     number of shares owned by him in the corporation.  If
     such certificate is counter-signed by the written
     signature of a transfer agent other than the
     corporation or its employee, the signatures of the
     officers of the corporation may be facsimiles.  If such
     certificate is counter-signed by the written signature
     of a registrar other than the corporation or its
     employee, the signatures of the transfer agent and the
     officers of the corporation may be facsimiles.  In case
     any officer, transfer agent or registrar who has signed
     or whose facsimile signature has been placed upon a
     certificate shall have ceased to be such officer,
     transfer agent or registrar before such certificate is
 74
     issued, it may be issued by the corporation with the
     same effect as if he were such officer, transfer agent
     or registrar at the date of its issue.

     Section 2 - Transfer of Shares:  Stock shall be
     transferable on the stock transfer books of the
     corporation in person or by attorney duly authorized
     and upon surrender and cancellation of the old
     certificates therefor.

     The Board of Directors of the corporation may close its
     stock transfer books for a period not exceeding fifty
     (50) days preceding the date of any meeting of
     shareholders or the date for the payment of any
     dividend.  In lieu of closing the stock transfer books
     the Board of Directors may fix in advance a date not
     more than fifty (50) days prior to the date of any
     meeting of shareholders or the date for the payment of
     any dividend as the record date for the determination
     of the shareholders entitled to notice of and to vote
     at any such meeting or entitled to receive payment of
     such dividend; and such shareholders, and only such
     shareholders, as shall be shareholders of record on the
     date so fixed shall be entitled to such notice of and
     to vote at such meeting or be entitled to receive
     payment of such dividend, as the case may be,
     notwithstanding the transfer of any stock on the books
     of the corporation after such record date fixed as
     aforesaid.  If the stock transfer books are not closed
     and no record date is fixed by the Board of Directors,
     no shares shall be voted at any meeting which shall
     have been transferred on the books of the corporation
     within ten (10) days next preceding the date of such
     meeting.

     Section 3 - Replacing Certificates:  In case of the
     loss or destruction of any certificate of stock and the
     submission of proper proof thereof by the owner, a new
     certificate may be issued in lieu thereof under such
     regulations and restrictions as the Board of Directors
     may prescribe.

ARTICLE XII:  AUTHORIZED SIGNATURES

     All checks, drafts and other negotiable instruments
     issued by the corporation shall be made in the name of
     the corporation and shall be signed by such one (1) of
     the officers of the corporation and countersigned by
     such other officer of the corporation or by such other
     person as the Board of Directors from time to time
     direct; provided, however, that the same person shall
     not both sign and countersign the same instrument;
     provided further, that dividend checks, payroll checks,
     customer deposit refund checks and cashier's checks
     drawn upon special accounts with designated
     depositaries need not be countersigned.
 75
ARTICLE XIII:  FIDELITY BONDS

     The officers and employees of the corporation shall, in
     the discretion of the Board of Directors, Executive
     Committee or Chief Executive Officer, give bonds for
     the faithful discharge of their respective duties in
     such form and for such amounts as they or any of them
     may direct.

ARTICLE XIV:  INDEMNIFICATION

     Section 1 - Every person (and the heirs, executors and
     administrators of such person) who is or was a director
     or officer of this corporation or of any subsidiary of
     this corporation or who, at the request of this
     corporation, served in any position or capacity or on
     any committee for this corporation or for or in any
     other corporation, partnership, association, trust,
     foundation, not-for-profit corporation, employee
     benefit plan or other organization or entity, shall be
     indemnified by the corporation against any and all
     liability and reasonable expense that may be incurred
     by him in connection with or resulting from any claim,
     action, suit or proceeding in which either (i) such
     person is wholly successful, thereby entitling such
     person to Mandatory Indemnification, or (ii) such
     person is not wholly successful but it is nevertheless
     determined, pursuant to the procedures set forth below
     in Section 2 of this Article IX of these By-Laws, that
     such person acted in good faith and that such person
     reasonably believed that (a) in the case of conduct in
     his official capacity, his conduct was in the
     corporation's best interests, or (b) in all other
     cases, his conduct was at least not opposed to the best
     interests of such corporation, entity or organization,
     and, in addition, with respect to any criminal action
     or proceeding, either had reasonable cause to believe
     his conduct was lawful or had no reasonable cause to
     believe his conduct was unlawful, thereby entitling
     such person to Permissive Indemnification.  The terms
     "claim", "action", "suit" or "proceeding" shall mean
     and include any claim, action, suit or proceeding
     (whether brought by or in the right of the corporation
     or any other corporation or otherwise), civil,
     criminal, administrative or investigative action, or
     threat thereof, in which a director or officer of the
     corporation (or his heirs, executors or administrators)
     may become involved as a party or otherwise:

     (a)  by reason of his being or having been a director
          or officer of the corporation, or of any
          subsidiary corporation of the corporation, or of
          any other corporation where he served as such at
          the request of the corporation, or

     (b)  by reason of his acting or having acted in any
          position or capacity or on any committee for this
 76     
          corporation or any subsidiary corporation of this
          corporation or in any position or capacity in or
          for a partnership, association, trust, foundation,
          not-for-profit corporation, employee benefit plan
          or other organization or entity where he served as
          such at the request of the corporation, or

     (c)  by reason of any action taken or not taken by him
          in any such capacity, whether or not he continues
          in such capacity at the time such liability or
          expense shall have been incurred.

     The terms "liability" and "expenses" shall include, but
     shall not be limited to, counsel fees and disbursements
     and amounts of judgments, fines or penalties against,
     and amounts paid in settlement by or on behalf of, a
     person, and excise taxes assessed with respect to an
     employee benefit plan, but shall not on account of
     profits realized by him in the purchase or sale of
     securities of the corporation.  The term "wholly
     successful" shall mean termination of any action, suit
     or proceeding against the person in question without
     any finding of liability or guilt against him or the
     expiration of a reasonable period of time after the
     making of any claim or threat of an action, suit or
     proceeding with out the institution of the same,
     without any payment or promise made to induce a
     settlement.

     Section 2 - With regard to Permissive Indemnification,
     the determination that a person acted in good faith and
     that such person reasonably believed that (a) in the
     case of conduct in his official capacity, his conduct
     was in the corporation's best interests, or (b) in all
     other cases, his conduct was at least not opposed to
     the best interests of the corporation, and, in
     addition, with respect to any criminal action or
     proceeding, either had reasonable cause to believe that
     his conduct was lawful or had no reasonable cause to
     believe that his conduct was unlawful with regard to a
     specific claim, action, suit or proceeding in or as to
     which such person is not wholly successful shall be
     made by or for the board of directors of the
     corporation in the manner hereinafter described.  Any
     request for such indemnification must first be proposed
     to the board of directors of the corporation, and a
     motion for such indemnification may be made by any
     director of the corporation, including a director who
     is seeking such indemnification for himself.  If a
     quorum of directors eligible to decide the matter
     exists within the limitations and requirements of I. C.
     23-1-37-12(b)(1), such directors may either (i) decide
     the question themselves; (ii) refer the matter to
     Special Legal Counsel for decision pursuant to I. C.
     23-1-37-12(b)(3)(A); or (iii) decline to take any
     action to either decide the question of such
     indemnification or refer the matter for decision to
     Special Legal Counsel.  If there does not exist a
 77
     quorum of directors eligible to decide the matter
     within the limitations and requirements of I.C. 23-1-
     37-12(b)(1), a majority of the entire board of
     directors may either (i) refer the matter to a
     committee of two or more directors who are eligible to
     vote thereon pursuant to I.C. 23-1-37-12(b)(2) who may
     either decide the matter themselves or refer the matter
     to Special Legal Counsel for decision pursuant to I.C.
     23-1-37-12(b)(3)(B); or (iii) decline to take any
     action to refer the matter of such indemnification to a
     committee or to Special Legal Counsel.  Any decision on
     the question of entitlement to such Permissive
     Indemnification by a majority of a quorum of the board
     of directors eligible to vote pursuant to I.C. 23-1-37-
     12(b)(1); by a special committee of eligible directors
     pursuant to I.C. 23-1-27-12(b)(2); or by Special Legal
     Counsel duly appointed pursuant to the provisions of
     I.C. 23-1-37-12(b)(3), shall be in the sole and
     absolute discretion of such person or persons who are
     to make such determination.  If it is determined and
     decided that such Permissive Indemnification should be
     given in a specific situation, the authorization for
     such indemnification and a determination of the amount
     thereof shall be made in accordance with the procedures
     and requirements of I.C. 23-1-37-12(c).  For purposes
     of this Section 2, Permissive Indemnification shall be
     deemed to have been denied (i) if a majority of any
     group of persons who are to decide the question do not
     vote in favor of the proposed indemnification; (ii) if
     the board of directors or any committee thereof
     declines to take any permitted action to either decide
     the question, refer it to a committee, or refer it to
     Special Legal Counsel; (iii) if no decision is made by
     the person or persons who were to decide such question
     within a period of six (6) months after such
     indemnification was first proposed to the board of
     directors of the corporation; or (iv) to the extent
     that the dollar amount of any indemnification to be
     made by the corporation is less than the total dollar
     amount of indemnification proposed or requested to be
     made.  If proposed Permissive Indemnification is
     denied, the question may not be reconsidered at any
     subsequent time by the corporation.

     Section 3 - Expenses incurred with respect to any
     claim, action, suit or proceeding may be advanced by
     the corporation (by action of the board of directors,
     whether or not a disinterested quorum exists) prior to
     the final disposition thereof upon receipt of an
     undertaking by or on behalf of the recipient to repay
     such amount unless he is entitled to indemnification
     under this Article of these By-Laws.

     Section 4 - The rights of Mandatory and Permissive
     Indemnification provided in this Article of the By-Laws
     shall be in addition to any rights to which any such
     person may otherwise be entitled by contract, as matter
     of law, or pursuant to I.C. 23-1-37.  Any person
     claiming the right to indemnification pursuant to any
 78
     provisions of these By-Laws may at any time apply for
     indemnification to or seek review of any decision
     denying indemnification or determining the amount
     thereof by a court pursuant to I.C. 23-1-37-11. 
     Persons who are not directors or officers of the
     corporation but who are employees or agents of the
     corporation or any subsidiary or who are directors or
     officers of any subsidiary may be indemnified to the
     extent authorized at any time or from time to time by
     the board of directors.

     Section 5 - Irrespective of the provisions of this
     Article of the By-Laws, the board of directors may, at
     any time or from time to time, approve indemnification
     of directors and officers or other persons to the full
     extent permitted by the provisions of the Indiana
     Business Corporation Law at the time in effect, whether
     on account of past or future transactions.

     Section 6 - To the extent not inconsistent with Indiana
     law as in effect from time to time, the board of
     directors may, at any time or from time to time,
     approve the purchase and maintenance of insurance on
     behalf of any such director, officer or other person
     against any liability asserted against him in his
     capacity or arising out of his status as a director,
     officer, employee or agent of the corporation or any
     corporation, partnership, association, employee benefit
     plan, trust, foundation, not-for-profit corporation or
     other organization or entity in which he served as such
     at the request of the corporation, whether or not the
     corporation would have the power to indemnify him under
     the provisions of this Article of the By-Laws.  In the
     event that any expense or liability otherwise subject
     to indemnification hereunder is covered entirely or in
     part by any insurance, the indemnification provided for
     by this Article of these By-Laws shall only be
     available, if at all, as to any uninsured liability or
     expense or that portion which is in excess of the
     amount of all available insurance coverage.  Under no
     circumstances shall any insurer or other person making
     payment under such an insurance policy or contract be
     subrogated to the rights of any person entitled to
     indemnification under this Article of these By-Laws.

     Section 7 - Any and all references contained in Article
     XIV of these By-Laws to any provision, section, sub-
     section or portion of the Indiana Code (I.C.) shall
     mean the Indiana Code as the same existed on June 26,
     1987, and no subsequent amendment, repeal,
     modification, change, or judicial invalidation of any
     provision of the Indiana Code subsequent to June 26,
     1987, shall alter, modify, or otherwise affect these
     By-Laws, and these By-Laws shall be construed and
     interpreted under the statutory law of the State of
     Indiana as it existed as of the date of adoption of
     these By-Laws.
 79
     Section 8 - The indemnification herein required or
     permitted by these By-Laws shall be a contractual
     obligation, under-taking and commitment of the
     corporation as to any person who either continued to
     serve or commenced to serve, following the date of the
     adoption of these amended indemnification By-Laws, as a
     director or officer of this corporation or any
     subsidiary of this corporation, or in any other
     position or capacity, at the request of this
     corporation or any subsidiary corporation, on any
     committee, partnership, association, trust, foundation,
     not-for-profit corporation, employee benefit plan, or
     other organization or entity, and no subsequent
     amendment or repeal of these By-Laws and no judicial
     decision invalidating the legislation authorizing the
     indemnification provided for by these By-Laws or
     invalidating all or any part of these indemnification
     By-Laws shall in any manner deny, diminish, limit,
     restrict, or qualify the indemnification herein
     provided for any such person who so continued to serve
     or commenced to serve with regard to any claim
     concerning any matter which occurred, which commenced
     to occur, or which continued to occur subsequent to the
     adoption of these indemnification By-Laws and prior to
     any such amendment, repeal, or judicial invalidation.

ARTICLE XV:  MISCELLANEOUS

     Section 1 - Depositaries:  The funds of the corporation
     shall be deposited in the name of the corporation with
     such depositaries as may be designated by the Board of
     Directors.

     Section 2 - Gender:  The masculine pronoun wherever
     used in these By-Laws shall mean or include the
     feminine pronoun where applicable.

ARTICLE XVI:  AMENDMENTS

     These By-Laws may be altered, amended or repealed by a
     majority vote of the whole Board of Directors at any
     meeting, the notice of which shall include notice of
     the proposed alteration, amendment or repeal.

EX-4

 81


                                       [Conformed]







            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                           WITH

                     BANKERS TRUST COMPANY, 

                                            As Trustee








                     SUPPLEMENTAL INDENTURE

                Providing among other things for

                      FIRST MORTGAGE BONDS

                     Series A 1993 due 2028

                               and
                                
                     Series B 1993 due 2023




                     Dated as of May 1, 1993







 82
     SUPPLEMENTAL INDENTURE, dated as of May 1, 1993,
between Southern Indiana Gas and Electric Company, a
corporation organized and existing under the laws of the
State of Indiana (hereinafter called the "Company"), party
of the first part, and Bankers Trust Company, a corporation
organized and existing under the laws of the State of New
York, as Trustee under the Mortgage hereinafter referred to,
party of the second part.

     Whereas, the Company heretofore executed and delivered
to Bankers Trust Company, as Trustee (hereinafter called the
"Trustee"), a certain Indenture of Mortgage and Deed of
Trust dated as of April 1, 1932, to secure an issue of bonds
of the Company, issued and to be issued in series, from time
to time, in the manner and subject to the conditions set
forth in the said Indenture, and the said Indenture has been
amended and supplemented by Supplemental Indentures dated as
of August 31, 1936, October 1, 1937, March 22, 1939, July 1,
1948, June 1, 1949, October 1, 1949, January 1, 1951, April
1, 1954, March 1, 1957, October 1, 1965, September 1, 1966,
August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972,
October 1, 1973, April 1, 1975, January 15, 1977, April 1,
1978, June 4, 1981, January 20, 1983, November 1, 1983,
March 1, 1984, June 1, 1984, November 1, 1984, July 1, 1985,
November 1, 1985, June 1, 1986, November 15, 1986, January
15, 1987, December 15, 1987, December 13, 1990 and April 1,
1993, which Indenture as so amended and supplemented is
hereinafter referred to as the "Mortgage" and as further
supplemented by this Supplemental Indenture is hereinafter
referred to as the "Indenture"; and

     Whereas, the Mortgage provides that the Company and the
Trustee may, from time to time, enter into such indentures
supplemental to the Mortgage as shall be deemed by them
necessary or desirable, to establish the terms and
provisions of any series of bonds to be issued under said
Mortgage and to add to the covenants and agreements of the
Company for the protection of the holders of bonds and of
the mortgaged and pledged property; and

     Whereas, the Company has entered into a Loan Agreement
dated as of May 1, 1993 with Warrick County, Indiana (the
"County") pursuant to which the County will issue
$22,200,000 aggregate principal amount of its Adjustable
Rate Environmental Improvement Bonds, 1993 Series A
(Southern Indiana Gas and Electric Company Project) in order
to provide funds to loan to the Company for the purpose of
financing a portion of the costs of acquiring, constructing
and equipping certain pollution control facilities, and
pursuant to such Loan Agreement the Company has agreed to
issue a series of its bonds under the Indenture in order to
evidence and secure certain of its indebtedness under the
Loan Agreement; and
 83
     Whereas, the Company has entered into a Loan Agreement
dated as of May 1, 1993 with the County pursuant to which
the County will issue $22,800,000 aggregate principal amount
of its Adjustable Rate Environmental Improvement Bonds, 1993
Series B (Southern Indiana Gas and Electric Company Project)
in order to provide funds to loan to the Company for the
purpose of financing a portion of the costs of acquiring,
constructing and equipping certain pollution control
facilities, and pursuant to such Loan Agreement the Company
has agreed to issue a series of its bonds under the
Indenture in order to evidence and secure certain of its
indebtedness under the Loan Agreement; and

     Whereas, the Company and the Trustee deem it necessary
or desirable to enter into this Supplemental Indenture for
such purposes; and

     Whereas, the Company by appropriate corporate action in
conformity with the terms of the Indenture has duly
determined to create a series of bonds which shall be issued
under the Indenture in an aggregate principal amount of
$22,200,000 and be designated as "First Mortgage Bonds,
Series A 1993 due 2028" (hereinafter sometimes referred to
as "Bonds of the Thirty-fifth Series"), shall bear interest
at the rate per annum set forth in, shall be subject to
certain optional and mandatory redemption rights and
obligations set forth in, and will otherwise be in the form
and have the terms and provisions provided for in this
Supplemental Indenture and set forth in the form of such
bonds below; and 

     Whereas, the Company by appropriate corporate action in
conformity with the terms of the Indenture has duly
determined to create a series of bonds which shall be issued
under the Indenture in an aggregate principal amount of
$22,800,000 and be designated as "First Mortgage Bonds,
Series B 1993 due 2023" (hereinafter sometimes referred to
as "Bonds of the Thirty-sixth Series"), shall bear interest
at the rate per annum set forth in, shall be subject to
certain optional and mandatory redemption rights and
obligations set forth in, and will otherwise be in the form
and have the terms and provisions provided for in this
Supplemental Indenture and set forth in the form of such
bonds below; and 

     Whereas, the definitive registered bonds without
coupons of the Thirty-fifth Series and the Trustee's
certificate of authentication to be borne by such bonds are
to be substantially in the following forms, respectively:


 84
   [FORM OF FULLY REGISTERED BOND OF THE THIRTY-FIFTH SERIES]

                     [FORM OF FACE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               FIRST MORTGAGE BOND, SERIES A 1993

                            DUE 2028

No________________                            $__________.


     Southern Indiana Gas and Electric Company, a
corporation of the State of Indiana (hereinafter called the
Company), for value received, hereby promises to pay to

                      or registered assigns
dollars, on May 1, 2028 at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
N.Y., in any coin or currency of the United States of
America which at the time of payment is legal tender for the
payment of public and private debts, and to 0ay to the
registered owner hereof interest thereon from the interest
payment date (May 1 or November 1) next preceding the date
of this bond unless the date hereof is prior to November 1,
1993, in which case from May 1, 1993 (or, if this bond is
dated between the record date for any interest payment date
and such interest payment date, then from such interest
payment date), at the rate from time to time borne by the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project) (the "Warrick County Bonds") issued by Warrick
County, Indiana (the "County") under the Indenture of Trust,
dated as of May 1, 1993 (the "County Indenture"), between
the County and The Citizens National Bank of Evansville, as
trustee (the "County Trustee"); provided, however, that in
no event shall the rate of interest borne by the Bonds of
this series exceed 10% per annum.  Such interest, in like
coin or currency, payable at said office or agency semi-
annually on May 1 and November 1 in each year, until the
Company's obligation with respect to the payment of such
principal shall have been discharged; provided, however,
that the amount of interest payable as set forth above on
any interest payment date (the "Original Interest Amount")
shall be reduced by an amount equal to the difference, if
any, between the Original Interest Amount and the amount of
interest due and payable on such interest payment date on a
like principal amount of Warrick County Bonds.  The
 85
principal and interest so payable on any May 1 or November 1
will, subject to certain exceptions provided in the Mortgage
hereinafter mentioned, be paid to the person in whose name
this bond is registered at the close of business on the
record date, which shall be the April 15 or October 15, as
the case may be, next preceding such interest payment date,
or, if such April 15 or October 15 shall be a legal holiday
or a day on which banking institutions in the Borough of
Manhattan, The City of New York, N.Y., are authorized or
obligated by law to close, the next preceding day which
shall not be a legal holiday or a day on which such
institutions are so authorized or obligated to close.

     The provisions of this bond are continued on the
reverse hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at
this place. 

     This bond shall not become obligatory until Bankers
Trust Company, the Trustee under the Mortgage, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

     In witness whereof, Southern Indiana Gas and Electric
Company has caused this bond to be signed in its name by its
President or a Vice President, by his signature or a
facsimile thereof, and a facsimile of its corporate seal to
be imprinted hereon, attested by its Secretary or an
Assistant Secretary, by his signature or a facsimile
thereof.

Dated:

                         SOUTHERN INDIANA GAS AND
                           ELECTRIC COMPANY


                         By:______________________________
                                 President and
                              Chief Executive Officer

Attest:


_______________________________
     Secretary


 86
                 [FORM OF TRUSTEE'S CERTIFICATE]

     This bond is one of the bonds of the series designated
therein, described in the within-mentioned Mortgage.

                    BANKERS TRUST COMPANY,
                                   as Trustee,


                    By:_______________________________
                       Authorized Officer





                    [FORM OF REVERSE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

           FIRST MORTGAGE BOND, SERIES A 1993 DUE 2028


     This bond is one of an issue of First Mortgage Bonds of
the Company, issuable in series, and is one of the series
designated in the title hereof, all issued and to be issued
under and equally secured (except as to any sinking fund
established in accordance with the provisions of the
Mortgage hereinafter mentioned for the bonds of any
particular series) by an Indenture of Mortgage and Deed of
Trust, dated as of April 1, 1932, executed by the Company to
Bankers Trust Company, as Trustee (the "Trustee"), as
amended and supplemented by indentures supplemental thereto,
including without limitation a Supplemental Indenture dated
as of May 1, 1993, to which Indenture as so amended and
supplemented (herein referred to as the Mortgage) reference
is made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights
of the holders of the bonds in respect thereof and the terms
and conditions upon which the bonds are secured.

     The Bonds of this series are issued and to be issued in
order to evidence and secure a loan made by the County to
the Company pursuant to a Loan Agreement dated as of May 1,
1993.  In order to provide moneys to fund such loan, the
County has issued the Warrick County Bonds under and
pursuant to the County Indenture.  Payments made by the
 87
Company of principal and interest on the Bonds of this
series are intended to be sufficient to permit payments of
principal and interest to be made on the Warrick County
Bonds.  Upon certain terms and conditions, moneys held under
and pursuant to the County Indenture, including moneys so
held from the proceeds of the sale of the Warrick County
Bonds or earnings on the investment of such proceeds, or
redemption of the Warrick County Bonds shall be credited to
or used for the payment of the Bonds of this series and to
the extent so credited or used shall satisfy a like amount
otherwise due hereunder.

     The Bonds of this series are subject to mandatory
redemption, in whole or in part, as the case may be, on each
date that Warrick County Bonds are to be redeemed.  The
principal amount of the Bonds of this series to be redeemed
on any such date shall be equal to the principal amount of
Warrick County Bonds called for redemption on that date. 
All redemptions of Bonds of this series shall be at 100% of
the principal amount thereof, plus accrued interest to the
redemption date.

     If and whenever the Trustee or the Company is notified
that an event of default has occurred and is continuing
under Section 901(d) of the County Indenture, and provided
that the principal of all Warrick County Bonds then
outstanding and the interest thereon shall have been
declared immediately due and payable, then not later than 2
business days following the occurrence of the foregoing
events, the Company shall, upon not less than 30 days' and
not more than 45 days' prior written notice given in the
manner provided in the Mortgage, call for redemption on a
redemption date selected by it not later than 45 days
following the date of such notice, all of the Bonds of this
series then outstanding, and shall on such redemption date
redeem the same at a price equal to 100% of the principal
amount thereof, together with accrued interest thereon to
the redemption date, except that such requirement or
redemption shall be deemed to be waived if, prior to the
date fixed for such redemption of the Bonds of this series,
such event of default is waived or cured.

     In case a completed default, as defined in the
Mortgage, shall occur, the principal of this bond and all
other bonds of the Company at any such time outstanding
under the Mortgage may be declared or may become due and
payable, upon the conditions and in the manner and with the
effect provided in the Mortgage.  The Mortgage provides that
such declaration may in certain events be waived by the
holders of a majority in principal amount of the bonds
entitled to vote then outstanding.
     
     This bond, subject to the limitations with regard
thereto contained in the County Indenture, is transferable
 88
as prescribed in the Mortgage by the registered owner hereof
in person, or by his duly authorized attorney, at the office
or agency of the Company in the Borough of Manhattan, The
City of New York, N.Y., upon surrender and cancellation of
this bond, and thereupon, a new fully registered bond of the
same series for a like principal amount will be issued to
the transferee in exchange thereof as provided in the
Mortgage, and upon payment, if the Company shall require it,
of the charges therein prescribed.  The Company and the
Trustee may deem and treat the person in whose name this
bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal and
interest due hereon and for all other purposes.

     The Bonds of this series are issuable as registered
bonds without coupons in denominations of $1,000 and
authorized multiples thereof.  In the manner and upon
payment of the charges prescribed in the Mortgage,
registered bonds without coupons of this series may be
exchanged for a like aggregate principal amount of fully
registered bonds without coupons of other authorized
denominations of the same series, upon presentation and
surrender thereof, for cancellation, to the Trustee at its
principal corporate trust office in the Borough of
Manhattan, The City of New York, N.Y.

     No recourse shall be had for the payment of the
principal of or interest on this bond against any
incorporator or any past, present or future subscriber to
the capital stock, stockholder, office or director of the
Company or of any predecessor or successor corporation,
either directly or through the Company or any predecessor or
successor corporation, under any rule of law, statute or
constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers,
stockholders, officers and directors being released by the
holder or owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the
Mortgage.

     Pursuant to the Mortgage, the holder or owner of this
bond by his acceptance hereof is deemed to have agreed to
amendments to the Mortgage which will eventually permit
certain amendments to the Mortgage with the consent of the
holders of 66-2/3% of the principal amount of the
outstanding bonds of all series issued under the Mortgage
and which redefine, effective at such time as all bonds of
each series of bonds issued under the Mortgage prior to
January 1, 1977 are no longer outstanding, the amounts
required to be spent by the Company under the Mortgage for
the repair, maintenance, renewal and replacement of its
property.

                      [END OF FORM OF BOND]
and
 89
     Whereas, the definitive registered bonds without
coupons of the Thirty-sixth Series and the Trustee's
certificate of authentication to be borne by such bonds are
to be substantially in the following forms, respectively:


   [FORM OF FULLY REGISTERED BOND OF THE THIRTY-SIXTH SERIES]

                     [FORM OF FACE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               FIRST MORTGAGE BOND, SERIES B 1993

                            DUE 2023

No_____________                               $__________


     Southern Indiana Gas and Electric Company, a
corporation of the State of Indiana (hereinafter called the
Company), for value received, hereby promises to pay to

                      or registered assigns
dollars, on May 1, 2023 at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
N.Y., in any coin or currency of the United States of
America which at the time of payment is legal tender for the
payment of public and private debts, and to pay to the
registered owner hereof interest thereon from the interest
payment date (May 1 or November 1) next preceding the date
of this bond unless the date hereof is prior to November 1,
1993, in which case from May 1, 1993 (or, if this bond is
dated between the record date for any interest payment date
and such interest payment date, then from such interest
payment date), at the rate from time to time borne by the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series B (Southern Indiana Gas and Electric Company
Project) (the "Warrick County Bonds") issued by Warrick
County, Indiana (the "County") under the Indenture of Trust,
dated as of May 1, 1993 (the "County Indenture"), between
the County and The Citizens National Bank of Evansville, as
trustee (the "County Trustee"); provided, however, that in
no event shall the rate of interest borne by the Bonds of
this series exceed 10% per annum.  Such interest, in like
coin or currency, payable at said office or agency semi-
annually on May 1 and November 1 in each year, until the
Company's obligation with respect to the payment of such
 90
principal shall have been discharged; provided, however,
that the amount of interest payable as set forth above on
any interest payment date (the "Original Interest Amount")
shall be reduced by an amount equal to the difference, if
any, between the Original Interest Amount and the amount of
interest due and payable on such interest payment date on a
like principal amount of Warrick County Bonds.  The
principal and interest so payable on any May 1 or November 1
will, subject to certain exceptions provided in the Mortgage
hereinafter mentioned, be paid to the person in whose name
this bond is registered at the close of business on the
record date, which shall be the April 15 or October 15, as
the case may be, next preceding such interest payment date,
or, if such April 15 or October 15 shall be a legal holiday
or a day on which banking institutions in the Borough of
Manhattan, The City of New York, N.Y., are authorized or
obligated by law to close, the next preceding day which
shall not be a legal holiday or a day on which such
institutions are so authorized or obligated to close.

     The provisions of this bond are continued on the
reverse hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at
this place. 

     This bond shall not become obligatory until Bankers
Trust Company, the Trustee under the Mortgage, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

     In witness whereof, Southern Indiana Gas and Electric
Company has caused this bond to be signed in its name by its
President or a Vice President, by his signature or a
facsimile thereof, and a facsimile of its corporate seal to
be imprinted hereon, attested by its Secretary or an
Assistant Secretary, by his signature or a facsimile
thereof.

Dated:
                         SOUTHERN INDIANA GAS AND
                           ELECTRIC COMPANY


                         By:______________________________
                              President and
                              Chief Executive Officer
Attest:


_______________________________
     Secretary

 91
                 [FORM OF TRUSTEE'S CERTIFICATE]

     This bond is one of the bonds of the series designated
therein, described in the within-mentioned Mortgage.

                         BANKERS TRUST COMPANY,
                                        as Trustee,


                         By:_______________________________
                              Authorized Officer


                    [FORM OF REVERSE OF BOND]

            SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

           FIRST MORTGAGE BOND, SERIES B 1993 DUE 2023


     This bond is one of an issue of First Mortgage Bonds of
the Company, issuable in series, and is one of the series
designated in the title hereof, all issued and to be issued
under and equally secured (except as to any sinking fund
established in accordance with the provisions of the
Mortgage hereinafter mentioned for the bonds of any
particular series) by an Indenture of Mortgage and Deed of
Trust, dated as of April 1, 1932, executed by the Company to
Bankers Trust Company, as Trustee (the "Trustee"), as
amended and supplemented by indentures supplemental thereto,
including without limitation a Supplemental Indenture dated
as of May 1, 1993, to which Indenture as so amended and
supplemented (herein referred to as the Mortgage) reference
is made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights
of the holders of the bonds in respect thereof and the terms
and conditions upon which the bonds are secured.

     The Bonds of this series are issued and to be issued in
order to evidence and secure a loan made by the County to
the Company pursuant to a Loan Agreement dated as of May 1,
1993.  In order to provide moneys to fund such loan, the
County has issued the Warrick County Bonds under and
pursuant to the County Indenture.  Payments made by the
Company of principal and interest on the Bonds of this
series are intended to be sufficient to permit payments of
principal and interest to be made on the Warrick County
92
Bonds.  Upon certain terms and conditions, moneys held under
and pursuant to the County Indenture, including moneys so
held from the proceeds of the sale of the Warrick County
Bonds or earnings on the investment of such proceeds, or
redemption of the Warrick County Bonds shall be credited to
or used for the payment of the Bonds of this series and to
the extent so credited or used shall satisfy a like amount
otherwise due hereunder.

     The Bonds of this series are subject to mandatory
redemption, in whole or in part, as the case may be, on each
date that Warrick County Bonds are to be redeemed.  The
principal amount of the Bonds of this series to be redeemed
on any such date shall be equal to the principal amount of
Warrick County Bonds called for redemption on that date. 
All redemptions of Bonds of this series shall be at 100% of
the principal amount thereof, plus accrued interest to the
redemption date.

     If and whenever the Trustee or the Company is notified
that an event of default has occurred and is continuing
under Section 901(d) of the County Indenture, and provided
that the principal of all Warrick County Bonds then
outstanding and the interest thereon shall have been
declared immediately due and payable, then not later than 2
business days following the occurrence of the foregoing
events, the Company shall, upon not less than 30 days' and
not more than 45 days' prior written notice given in the
manner provided in the Mortgage, call for redemption on a
redemption date selected by it not later than 45 days
following the date of such notice, all of the Bonds of this
series then outstanding, and shall on such redemption date
redeem the same at a price equal to 100% of the principal
amount thereof, together with accrued interest thereon to
the redemption date, except that such requirement or
redemption shall be deemed to be waived if, prior to the
date fixed for such redemption of the Bonds of this series,
such event of default is waived or cured.

     In case a completed default, as defined in the
Mortgage, shall occur, the principal of this bond and all
other bonds of the Company at any such time outstanding
under the Mortgage may be declared or may become due and
payable, upon the conditions and in the manner and with the
effect provided in the Mortgage.  The Mortgage provides that
such declaration may in certain events be waived by the
holders of a majority in principal amount of the bonds
entitled to vote then outstanding.
     
     This bond, subject to the limitations with regard
thereto contained in the County Indenture, is transferable
as prescribed in the Mortgage by the registered owner hereof
in person, or by his duly authorized attorney, at the office
or agency of the Company in the Borough of Manhattan, The
 93
City of New York, N.Y., upon surrender and cancellation of
this bond, and thereupon, a new fully registered bond of the
same series for a like principal amount will be issued to
the transferee in exchange thereof as provided in the
Mortgage, and upon payment, if the Company shall require it,
of the charges therein prescribed.  The Company and the
Trustee may deem and treat the person in whose name this
bond is registered as the absolute owner for the purpose of
receiving payment of or on account of the principal and
interest due hereon and for all other purposes.

     The Bonds of this series are issuable as registered
bonds without coupons in denominations of $1,000 and
authorized multiples thereof.  In the manner and upon
payment of the charges prescribed in the Mortgage,
registered bonds without coupons of this series may be
exchanged for a like aggregate principal amount of fully
registered bonds without coupons of other authorized
denominations of the same series, upon presentation and
surrender thereof, for cancellation, to the Trustee at its
principal corporate trust office in the Borough of
Manhattan, The City of New York, N.Y.

     No recourse shall be had for the payment of the
principal of or interest on this bond against any
incorporator or any past, present or future subscriber to
the capital stock, stockholder, office or director of the
Company or of any predecessor or successor corporation,
either directly or through the Company or any predecessor or
successor corporation, under any rule of law, statute or
constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers,
stockholders, officers and directors being released by the
holder or owner hereof by the acceptance of this bond and
being likewise waived and released by the terms of the
Mortgage.

     Pursuant to the Mortgage, the holder or owner of this
bond by his acceptance hereof is deemed to have agreed to
amendments to the Mortgage which will eventually permit
certain amendments to the Mortgage with the consent of the
holders of 66-2/3% of the principal amount of the
outstanding bonds of all series issued under the Mortgage
and which redefine, effective at such time as all bonds of
each series of bonds issued under the Mortgage prior to
January 1, 1977 are no longer outstanding, the amounts
required to be spent by the Company under the Mortgage for
the repair, maintenance, renewal and replacement of its
property.


                      [END OF FORM OF BOND]


  94
and

     Whereas, all things necessary to make the Bonds of the
Thirty-fifth Series and the Thirty-sixth Series, when
authenticated by the Trustee and issued as in the Indenture
provided, the valid, binding and legal obligations of the
Company, entitled in all respects to the security of the
Indenture, have been done and performed, and the creation,
execution and delivery of this Supplemental Indenture has in
all respects been duly authorized; and

     Whereas, the Company and the Trustee deem it advisable
to enter into this Supplemental Indenture for the purposes
above stated and for the purpose of describing the Bonds of
the Thirty-fifth Series and the Thirty-sixth Series, and of
providing the terms and conditions of redemption thereof;

     Now, therefore, this supplemental indenture witnesseth: 
That Southern Indiana Gas and Electric Company, in
consideration of the premises and of one dollar to it duly
paid by the Trustee at or before the ensealing and delivery
of these presents, the receipt whereof is hereby
acknowledged, and of the purchase and acceptance of the
bonds issued or to be issued hereunder by the holders or
registered owners thereof, and in order to secure the
payment of the principal, premium, if any, and interest of
all bonds at any time issued and outstanding under the
Indenture, according to their tenor and effect, and the
performance of all of the provisions hereof and of said
bonds, hath granted, bargained, sold, released, conveyed,
assigned, transferred, pledged, set over and confirmed and
by these presents doth grant, bargain, sell, release,
convey, assign, transfer, pledge, set over and confirm unto
Bankers Trust Company, as Trustee, and to its successor or
successors in said trust, and to its and their assigns
forever, all the properties of the Company located in the
State of Indiana described in Schedule A (which is
identified by the signature of an officer of each party
hereto at the end thereof) hereto annexed and hereby made a
part hereof and does hereby confirm that the Company will
not cause or consent to a partition, either voluntary or
through legal proceedings, of property, whether herein
described or heretofore or hereafter acquired, in which its
ownership shall be as a tenant in common, except as
permitted by and in conformity with the provisions of the
Indenture and particularly of Article X thereof.

     Together with all and singular the tenements,
hereditaments and appurtenances belonging or in any wise
appertaining to the aforesaid property or any party thereof,
with the reversion and reversions, remainder and remainders
and (subject to the provisions of Article X of the
Indenture), the tolls, rents, revenues, issues, earnings,
income, product and profits thereof, and all the estate,
right title interest and claim whatsoever, at law as well as
 95
in equity, which the Company now has or may hereafter
acquire in and to the aforesaid property and franchises and
every part and parcel thereof.

     To have and to hold all such properties, real, personal
and mixed, mortgaged, pledged or conveyed by the Company as
aforesaid, or intended so to be, unto the Trustee and its
successors and assigns forever.

     In trust, nevertheless, upon the terms and trusts of
the Indenture, for those who shall hold the bonds and
coupons issued and to be issued thereunder, or any of them,
without preference, priority or distinction as to lien of
any of said bonds and coupons over any others thereof by
reason of priority in the time of the issue or negotiation
thereof, or otherwise howsoever, subject, however, to the
provisions in reference to extended, transferred or pledged
coupons and claims for interest set forth in the Indenture
(and subject to any sinking funds that may be created for
the benefit of any particular series).

     Provided, however, and these presents are upon the
condition that, if the Company, its successors or assigns,
shall pay or cause to be paid, the principal of, premium, if
any, and interest on said bonds, at the times and in the
manner stipulated therein and herein, and shall keep,
perform and observe all and singular the covenants and
promises in said bonds and in the Indenture expressed to be
kept, performed and observed by or on the part of the
Company, then this Supplemental Indenture and the estate and
rights hereby granted shall cease, determine and be void,
otherwise to be and remain in full force and effect.

     It is hereby covenanted, declared and agreed, by the
Company, that all such bonds and coupons are to be issued,
authenticated and delivered, and that all property subject
or to become subject hereto is to be held, subject to the
further covenants, conditions, uses and trusts in the
Indenture set forth, and the Company, for itself and its
successors and assigns, does hereby covenant and agree to
and with the Trustee and its successor or successors in such
trust, for the benefit of those who shall hold said bonds
and interest coupons, or any of them, as follows:



 96
                             PART I.

                           DEFINITIONS

     The terms defined in this Part I shall, for all
purposes of this Supplemental Indenture, have the meanings
herein specified, unless the context otherwise requires:

Warrick County Bonds:

     The term "Warrick County Bonds", when used in
connection with the Bonds of the Thirty-fifth Series, shall
mean the Adjustable Rate Environmental Improvement Revenue
Bonds, 1993 Series A (Southern Indiana Gas and Electric
Company Project) issued under and pursuant to the applicable
County Indenture and, when used in connection with the Bonds
of the Thirty-Sixth Series, shall mean the Adjustable Rate
Environmental Improvement Revenue Bonds, 1993 Series B
(Southern Indiana Gas and Electric Company Project) issued
under and pursuant to the applicable County Indenture.

County Indenture:

     The term "County Indenture", when used in connection
with the Bonds of the Thirty-fifth Series, shall mean the
Indenture of Trust, dated as of May 1, 1993, by and between
Warrick County, Indiana and The Citizens National Bank of
Evansville, as Trustee, and any indenture supplemental
thereto or amendatory thereof, pursuant to which the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project) are issued and secured and, when used in connection
with the Bonds of the Thirty-Sixth Series, shall mean the
Indenture of Trust, dated as of May 1, 1993, by and between
Warrick County, Indiana and The Citizens National Bank of
Evansville, as Trustee, and any indenture supplemental
thereto or amendatory thereof, pursuant to which the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series B (Southern Indiana Gas and Electric Company
Project) Bonds are issued and secured.


County Trustee:

     The term "County Trustee", shall mean the person and/or
corporation acting as trustee at any time under the
applicable County Indenture.
 97
Loan Agreement:

     The term "Loan Agreement", when used in connection with
the Bonds of the Thirty-Fifth Series, shall mean the Loan
Agreement dated as of May 1, 1993 between Warrick County,
Indiana, a municipal corporation and political subdivision
of the State of Indiana, and the Company, relating to the
Adjustable Rate Environmental Improvement Revenue Bonds,
1993 Series A (Southern Indiana Gas and Electric Company
Project), and any and all modifications, amendments and
Supplements thereof and, when used in connection with the
Bonds of the Thirty-Sixth Series, shall mean the Loan
Agreement dated as of May 1, 1993 between Warrick County,
Indiana, and the Company, relating to the Adjustable Rate
Environmental Improvement Revenue Bonds, 1993 Series B
(Southern Indiana Gas and Electric Company Project), and any
and all modifications, amendments and Supplements thereof.


                            PART II.

        DESCRIPTION OF BONDS OF THE THIRTY-FIFTH SERIES  

     Section 1.  Bonds of the Thirty-fifth Series shall
mature on the date set forth in the form of bond relating
thereto hereinbefore set forth, shall bear interest at the
rate from time to time borne by the Warrick County Bonds;
provided, however, that in no event shall the rate of
interest borne by the Bonds of the Thirty-fifth Series
exceed 10%.  Such interest, payable semi-annually, on May 1
and November 1 in each year, and all bonds of said series
shall be designated as hereinbefore in the sixth Whereas
clause set forth.  Both principal of and interest on said
bonds shall be payable, to the extent specified in the form
of bond hereinabove set forth, in any coin or currency of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts, at
the office or agency of the Company in the Borough of
Manhattan, The City of New York, N.Y.  Definitive bonds of
said series may be issued, originally or otherwise, only as
registered bonds without coupons; and they and the Trustee's
certificate of authentication shall be substantially in the
forms hereinbefore recited, respectively.  Definitive
registered bonds of the Thirty-fifth Series may be issued in
the denomination of $1,000 and in such other denominations
(in multiples of $1,000) as the Board of Directors of the
Company shall approve, and execution and delivery to the
Trustee for authentication shall be conclusive evidence of
such approval.  In the manner and upon payment of the
charges prescribed in the Indenture, registered bonds
without coupons of said series may be exchanged for a like
aggregate principal amount of fully registered bonds without
coupons of other authorized denominations of the same
series, upon presentation and surrender thereof for
 98
cancellation to the Trustee at its principal corporate trust
office in the Borough of Manhattan, The City of New York,
N.Y.  However, notwithstanding the provisions of Section 12
of the Indenture, no charge shall be made upon any transfer
or exchange of bonds of said series other than for any tax
or taxes or other governmental charge required to be paid by
the Company.  The form of the temporary bonds of said series
shall be in substantially the form of the form of registered
bond hereinbefore recited with such appropriate changes
therein as are required on account of the temporary nature
thereof.  Said temporary bonds of said series shall be in
registered form without coupons, registrable as to
principal, and shall be exchangeable for definitive bonds of
said series when prepared.

     The person in whose name any registered bond without
coupons of the Thirty-fifth Series is registered at the
close of business on any record date (as hereinbelow
defined) with respect to any interest payment date shall be
entitled to receive the interest payable on such interest
payment date notwithstanding the cancellation of such
registered bond upon any transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except if and to the extent the Company shall
default in the payment of the interest due on such interest
payment date, in which case such defaulted interest shall be
paid to the person in whose name such bond is registered
either at the close of business on the day preceding the
date of payment of such defaulted interest or on a
subsequent record date for such payment if one shall have
been established as hereinafter provided.  A subsequent
record date may be established by or on behalf of the
Company by notice mailed to the holders of bonds not less
than ten days preceding such record date, which record date
shall be not more than thirty days prior to the subsequent
interest payment date.  The term "record date" as used in
this Section with respect to any regular interest payment
date shall mean the April 15 or October 15, as the case may
be, next preceding such interest payment date, or, if such
April 15 or October 15 shall be a legal holiday or a day on
which banking institutions in the Borough of Manhattan, The
City of New York, N.Y., are authorized or obligated by law
to close, the next preceding day which shall not be a legal
holiday or day on which such institutions are so authorized
or obligated to close.

     Except as provided in this Section, every registered
bond without coupons of the Thirty-fifth Series shall be
dated and shall bear interest as provided in Section 10 of
the Indenture; provided, however, that so long  as there is
no existing default in the payment of interest on the bonds,
the holder of any bond authenticated by the Trustee between
the record date for any interest payment date and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
 99
have no claim against the Company with respect thereto; and
provided, further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the May 1 or November 1, as the case may be,
next preceding the date of such bond, to which interest has
been paid or, if the Company shall be in default with
respect to the interest due on November 1, 1993, then from
May 1, 1993.

     It is provided in the County Indenture that moneys on
deposit with the County Trustee for redemption of Warrick
County Bonds under certain circumstances shall be credited
to or used for the payment of principal or interest on the
Bonds of the Thirty-fifth Series.  The Company shall notify
the Trustee of all credits to or payments of principal
(whether at maturity, by redemption or by acceleration) and
interest on the Bonds of the Thirty-fifth Series by mailing
a statement to the Trustee on the date of such credit or
payment to the effect that such credit or payment has been
made, and further stating the extent to which the credit or
payment has been made on account of redemption of Warrick
County Bonds or from funds on deposit with the County
Trustee under the County Indenture.  In addition, the
Company shall promptly notify the Trustee of each change in
the interest rate borne by the Warrick County Bonds.


                            PART III.

        DESCRIPTION OF BONDS OF THE THIRTY-SIXTH SERIES  

     Section 1.  Bonds of the Thirty-sixth Series shall
mature on the date set forth in the form of bond relating
thereto hereinbefore set forth, shall bear interest at the
rate from time to time borne by the Warrick County Bonds;
provided, however, that in no event shall the rate of
interest borne by the Bonds of the Thirty-sixth Series
exceed 10%.  Such interest, payable semi-annually, on May 1
and November 1 in each year, and all bonds of said series
shall be designated as hereinbefore in the seventh Whereas
clause set forth.  Both principal of and interest on said
bonds shall be payable, to the extent specified in the form
of bond hereinabove set forth, in any coin or currency of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts, at
the office or agency of the Company in the Borough of
Manhattan, The City of New York, N.Y.  Definitive bonds of
said series may be issued, originally or otherwise, only as
registered bonds without coupons; and they and the Trustee's
certificate of authentication shall be substantially in the
forms hereinbefore recited, respectively.  Definitive
registered bonds of the Thirty-sixth Series may be issued in
the denomination of $1,000 and in such other denominations
 100
(in multiples of $1,000) as the Board of Directors of the
Company shall approve, and execution and delivery to the
Trustee for authentication shall be conclusive evidence of
such approval.  In the manner and upon payment of the
charges prescribed in the Indenture, registered bonds
without coupons of said series may be exchanged for a like
aggregate principal amount of fully registered bonds without
coupons of other authorized denominations of the same
series, upon presentation and surrender thereof for
cancellation to the Trustee at its principal corporate trust
office in the Borough of Manhattan, The City of New York,
N.Y.  However, notwithstanding the provisions of Section 12
of the Indenture, no charge shall be made upon any transfer
or exchange of bonds of said series other than for any tax
or taxes or other governmental charge required to be paid by
the Company.  The form of the temporary bonds of said series
shall be in substantially the form of the form of registered
bond hereinbefore recited with such appropriate changes
therein as are required on account of the temporary nature
thereof.  Said temporary bonds of said series shall be in
registered form without coupons, registrable as to
principal, and shall be exchangeable for definitive bonds of
said series when prepared.

     The person in whose name any registered bond without
coupons of the Thirty-sixth Series is registered at the
close of business on any record date (as hereinbelow
defined) with respect to any interest payment date shall be
entitled to receive the interest payable on such interest
payment date notwithstanding the cancellation of such
registered bond upon any transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except if and to the extent the Company shall
default in the payment of the interest due on such interest
payment date, in which case such defaulted interest shall be
paid to the person in whose name such bond is registered
either at the close of business on the day preceding the
date of payment of such defaulted interest or on a
subsequent record date for such payment if one shall have
been established as hereinafter provided.  A subsequent
record date may be established by or on behalf of the
Company by notice mailed to the holders of bonds not less
than ten days preceding such record date, which record date
shall be not more than thirty days prior to the subsequent
interest payment date.  The term "record date" as used in
this Section with respect to any regular interest payment
date shall mean the April 15 or October 15, as the case may
be, next preceding such interest payment date, or, if such
April 15 or October 15 shall be a legal holiday or a day on
which banking institutions in the Borough of Manhattan, The
City of New York, N.Y., are authorized or obligated by law
to close, the next preceding day which shall not be a legal
holiday or day on which such institutions are so authorized
or obligated to close.
 101
     Except as provided in this Section, every registered
bond without coupons of the Thirty-sixth Series shall be
dated and shall bear interest as provided in Section 10 of
the Indenture; provided, however, that so long  as there is
no existing default in the payment of interest on the bonds,
the holder of any bond authenticated by the Trustee between
the record date for any interest payment date and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
have no claim against the Company with respect thereto; and
provided, further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the May 1 or November 1, as the case may be,
next preceding the date of such bond, to which interest has
been paid or, if the Company shall be in default with
respect to the interest due on November 1, 1993, then from
May 1, 1993.

     It is provided in the County Indenture that moneys on
deposit with the County Trustee for redemption of Warrick
County Bonds under certain circumstances shall be credited
to or used for the payment of principal or interest on the
Bonds of the Thirty-sixth Series.  The Company shall notify
the Trustee of all credits to or payments of principal
(whether at maturity, by redemption or by acceleration) and
interest on the Bonds of the Thirty-sixth Series by mailing
a statement to the Trustee on the date of such credit or
payment to the effect that such credit or payment has been
made, and further stating the extent to which the credit or
payment has been made on account of redemption of Warrick
County Bonds or from funds on deposit with the County
Trustee under the County Indenture.  In addition, the
Company shall promptly notify the Trustee of each change in
the interest rate borne by the Warrick County Bonds.


                            PART IV.


            ISSUE OF BONDS OF THE THIRTY-FIFTH SERIES

     Section 1.  The principal amount of Bonds of the
Thirty-fifth Series which may be authenticated and delivered
hereunder is limited to the aggregate principal amount of
Twenty-two Million Two Hundred Thousand Dollars
($22,200,000).

     Section 2.  Bonds of the Thirty-fifth Series in the
aggregate principal amount of Twenty-two Million Two Hundred
Thousand Dollars ($22,200,000) may at any time subsequent to
the execution hereof be executed by the Company and
delivered to the Trustee and shall be authenticated by the
 102
Trustee and delivered (either before or after the recording
hereof) to the Company upon direction of the Company
evidenced by a writing or writings, signed by its President
or one of its Vice Presidents and its Treasurer or one of
its Assistant Treasurers, at such time or times as may be
requested by the Company upon the receipt by the Trustee of
the certificates, resolutions, opinions and other documents
required by the Indenture.

     Section 3.  The consideration for the Bonds of the
Thirty-fifth Series shall be the loan from Warrick County,
Indiana, provided for in Section 4.1 of the Loan Agreement,
which shall be deposited and disbursed pursuant to the Loan
Agreement.


                             PART V.

            ISSUE OF BONDS OF THE THIRTY-SIXTH SERIES

     Section 1.  The principal amount of Bonds of the
Thirty-sixth Series which may be authenticated and delivered
hereunder is limited to the aggregate principal amount of
Twenty-two Million Eight Hundred Thousand Dollars
($22,800,000).

     Section 2.  Bonds of the Thirty-sixth Series in the
aggregate principal amount of Twenty-two Million Eight
Hundred Thousand Dollars ($22,800,000) may at any time
subsequent to the execution hereof be executed by the
Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered (either before or
after the recording hereof) to the Company upon direction of
the Company evidenced by a writing or writings, signed by
its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers, at such time
or times as may be requested by the Company upon the receipt
by the Trustee of the certificates, resolutions, opinions
and other documents required by the Indenture.

     Section 3.  The consideration for the Bonds of the
Thirty-sixth Series shall be the loan from Warrick County,
Indiana, provided for in Section 4.1 of the Loan Agreement,
which shall be deposited and disbursed pursuant to the Loan
Agreement.




 103
                            PART VI.

                      REDEMPTION PROVISIONS

     Section 1.  The Bonds of the Thirty-fifth Series and
the Bonds of the Thirty-sixth Series shall be subject to
redemption by the Company prior to maturity, respectively,
in the events and in the manner and at the redemption prices
set forth in the respective forms of Bond of such series
contained in the eight and ninth Whereas clauses hereof and
not otherwise.

     Section 2.  In the manner provided by the provisions of
Article IX of the Indenture, notice of redemption shall be
mailed not less than thirty (30) and not more than forty-
five (45) days prior to the date of redemption, to the
registered owner of the Bonds of the Thirty-fifth Series or
of the Bonds of the Thirty-sixth Series, as the case may be,
at the address thereof as the same shall appear on the
transfer register of the Company; provided, however, that
the owners of all of the Bonds of the Thirty-fifth Series or
the owners of all of the Bonds of the Thirty-sixth Series
may agree in writing with the Company to a shorter notice
period with respect to their respective series, and such
agreement, if filed with the Trustee, shall be binding on
the Company.




                            PART VII.

                         MISCELLANEOUS 

     Section 1.  The Company covenants that the provisions
of Section 36A of the Indenture and of Section 1.02 of the
Supplemental Indenture dated as of July 1, 1948, which are
to remain in effect so long as any bonds of the series
referred to in said Section shall be outstanding under the
Indenture, shall remain in full force and effect so long as
any Bonds of the Thirty-fifth Series and any Bonds of the
Thirty-sixth Series shall be outstanding under the
Indenture.

     Section 2.  Except as herein otherwise expressly
provided, no duties, responsibilities or liabilities are
assumed, or shall be construed to be assumed, by the Trustee
by reason of this Supplemental Indenture, other than as set
forth in the Mortgage.  The Trustee shall not be responsible
for the recitals herein or in the bonds (except the
Trustee's certificate of authentication), all of which are
made by the Company solely.
 104
     Section 3.  As supplemented and amended by this
Supplemental Indenture, the Mortgage is in all respects
ratified and confirmed, and the Mortgage and this
Supplemental Indenture shall be read, taken and construed as
one and the same instrument.

     Section 4.  This Supplemental Indenture may be executed
in several counterparts and all such counterparts executed
and delivered, each as an original, shall constitute but one
and the same instrument.

 105
     In Witness Whereof, Southern Indiana Gas and Electric
Company, party of the first part hereto, and Bankers Trust
Company, party of the second part hereto, have caused these
presents to be executed in their respective names by their
respective Chairmen of the Board or Presidents or one of
their Vice Presidents or Assistant Vice Presidents and their
respective seals to be hereunto affixed and attested by
their respective Secretaries or one of their Assistant
Secretaries, all as of the day and year first above written.


(SEAL)                        SOUTHERN INDIANA GAS AND
                                ELECTRIC COMPANY,


                              By:  /s/ R.G. Reherman
                                    R.G. Reherman
                                   President and
                                  Chief Executive Officer
Attest:


/s/ A.E. Goebel
A.E. Goebel 
Senior Vice President, 
  Secretary and Treasurer



(SEAL)                             BANKERS TRUST COMPANY,


                                   By:  /s/ Samir Pandiri
                                        Samir Pandiri
                                    Assistant Vice President

Attest:


/s/ Shikha Dombek             
Shikha Dombek
Assistant Secretary

 106

STATE OF INDIANA         )
                         :    ss.:
COUNTY OF VANDERBURGH    )


     On this ____ day of May, 1993, before me, the
undersigned, a notary public in and for the county and state
aforesaid, personally came R.G. Reherman, to me known, who
being by me duly sworn, did depose and say that he resides
at 10881 Watershore Drive, Evansville, Indiana 47710; that
he is President and Chief Executive Officer of Southern
Indiana Gas and Electric Company, one of the corporations
described in and which executed the foregoing instrument;
that he knows the seal of the said corporation; that the
seal affixed to said instrument is such corporate seal; that
it was so affixed by order of the Board of Directors of said
corporation and that he signed his name thereto by like
order; and the said R.G. Reherman acknowledged the execution
of the foregoing instrument on behalf of the said
corporation as the voluntary act and deed of the said
corporation for the uses and purposes therein set forth.

     In Witness Whereof, I have hereunto set my hand and
seal the day and year first above written.



(SEAL)              _____________________________
                       Notary Public



My Commission Expires

My County of Residence is


 107

STATE OF NEW YORK   )
                    :    ss.:
COUNTY OF NEW YORK  )


     On this ____ day of May, 1993, before me, the
undersigned, a notary public in and for the county and state
aforesaid, personally came Samir Pandiri, to me known, who
being by me duly sworn, did depose and say that he resides
at 45 River Drive South, Jersey City, NJ  07310; that he is
an Assistant Vice President of Bankers Trust Company, one of
the corporations described in and which executed the
foregoing instrument; that he knows the seal of the said
corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation and that he signed
his name thereto by like order; and the said Samir Pandiri,
acknowledged the execution of the foregoing instrument on
behalf of the said corporation as the voluntary act and deed
of the said corporation for the uses and purposes therein
set forth.

     In Witness Whereof, I have hereunto set my hand and
seal the day and year first above written.



(SEAL)              ___________________________________
                         Notary Public

 108
                               A-1

                           SCHEDULE A

          Detailed Description of Additional Properties


             Real Estate in Warrick County, Indiana

     Part of the East Half of the Northwest Quarter of
Section Fifteen (15), Township Seven (7) South, Range Eight
(8) West, in Warrick County, Indiana, more fully described
in deed dated January 14, 1985 from Old National Bank in
Evansville, Indiana, recorded in the office of the Recorder
of Warrick County, Indiana, in Deed File No. 2, Card Number
15148.



                    Signed for identification



                    /s/ A.E. Goebel                       
                    A.E. Goebel, Senior Vice President,
                         Secretary and Treasurer
                    SOUTHERN INDIANA GAS AND ELECTRIC
                      COMPANY



                    /s/ Samir Pandiri                     
                    Samir Pandiri, Assistant Vice President
                    BANKERS TRUST COMPANY

EX-10.20

 110
          SOUTHERN INDIANA GAS & ELECTRIC COMPANY
           CORPORATE PERFORMANCE INCENTIVE PLAN
                     FEBRUARY 1994


I.    PURPOSE OF THE OUTLINE

      *   To highlight the annual corporate performance
          incentive plan approved for the period January
          1994 - December 1996, subject to annual review by
          the compensation committee of the Board of
          Directors.

      *   To review the objectives and key features of the
          plan.

II.   PLAN OBJECTIVES

      *   To motivate and reward outstanding performance by
          SIGECO and its executive team.

      *   To compare SIGECO's performance with a group of
          regional utilities.

      *   To focus on stockholder and rate payer interests.

      *   To support long-term objectives by achieving
          short-term goals.

III.  KEY FEATURES OF THE PLAN

      *   Participation limited to officers, management
          staff, and other selected management positions.

      *   Incentive awards determined primarily by
          corporate results:

          -  Five measures of Company performance.
          -  Results for annual and multi-year periods
             compared to ten other utilities.

      *   Payments of awards in cash.

      *   Levels of award opportunities established to
          reflect organizational level of responsibility
          and impact on company performance for each
          position.

      *   Opportunity for the Chief Executive Officer to
          adjust individual awards by +/- 5% based on his
          judgment of the participants' base salaries
          during the plan year.

      *   Award levels stated as percentage of
          participants' basic salaries during the plan
          year.

      *   Maximum annual incentive plan fund limited to
          1.5% of net income.
 111
IV.   PARTICIPATION AND INCENTIVE AWARD LEVELS

      *   A review of SIGECO's organization structure
          suggests that eligibility for plan participation
          should be limited to officer and key management
          positions per the following categories:


                                  RANGE OF AWARD OPPORTUNITIES
INCENTIVE                                         (% OF BASE SALARY)
CATEGORY       POSITION                         THRESHOLD     MAXIMUM

                                                          
   I.     Chairman and Chief Executive Officer      20%         30%

  II.     Sr. Vice President-Operations             15%         25%
          Sr. Vice President-Secretary & Treasurer

 III.     All Other Plan Participants               10%         20%


V.    INCENTIVE PLAN FUNDING

      *   The size of the incentive fund will be determined
          each plan year by five measures of Company
          performance compared with the performance of ten
          utilities.

      *   Measures to be used are shown below.  Different
          measures may be appropriate in subsequent plan
          years based on Company objectives and priorities.



PERFORMANCE MEASURES                           BASIS FOR COMPARISON
                                            
Shareholder Related

1. Ratio of market to book value               Fiscal year end - highest

2. Total shareholder return on common stock    Five-year total return -
                                               highest

Customer Related

1. Revenue per kilowatt hour                   Annual average - lowest

2. Revenue per Mcf                             Annual average - lowest

3. Total operating expenses per customer       Average annual growth rate
                                               over a three year period -
                                               lowest

 112
VI.   COMPARISON OF RESULTS FOR PLAN YEAR

      *   SIGECO's results for the five performance
          measures will be compared to the performance of
          10 utilities:  8 combination companies (primarily
          located in the midwest), 1 electric and 1
          gas company (both located in Indiana).



COMPARISON COMPANIES
       
      *   Indiana Energy               *   Louisville Gas & Electric
      *   Indianapolis Power & Light   *   Northwestern Public Service
      *   Interstate Power             *   Orange & Rockland Utilities
      *   Iowa-Illinois Gas & Electric *   Wisconsin Power & Light
      *   Madison Gas & Electric       *   Wisconsin Public Service


      *   Comparing SIGECO's performance to other   
          utilities:

          -  provides an objective measure from the
          standpoint of the Company's external publics,

          -  encourages management to out-perform similar
          utilities,

          -  reduces the influence of factors beyond
          management's control, such as general economic
          and utility industry conditions.

      *   At the end of the plan year, the performance
          scale shown below is used to evaluate SIGECO's
          performance for each of the measures selected,
          compared with the utility group.



      PERFORMANCE LEVEL                    PERFORMANCE RATING    RANKING
                                                                 POINTS
                                                              
      Equals or exceeds nine companies     Outstanding              20
      in the comparison group

      Equals or exceeds seven companies    Superior                 15
      in the comparison group

      Equals or exceeds five companies in  Satisfactory             10
      the comparison group

      Falls below the fifth highest        Below Standard            0
      company in the comparison group

 113



              PERFORMANCE RATING         TOTAL POINTS
                                        
                 Outstanding               90 - 100

                 Superior                  70 - 89

                 Satisfactory              50 - 69

                 Below Standard            Below 50

      *   The Chairman and Chief Executive Officer's award
          will be established directly from the performance
          rating of SIGECO against the comparison
          companies.

      *   The Chairman will have the latitude to adjust the
          indicated awards for other participating
          executives by +/- 5%, based on his evaluation of
          their individual contributions during the plan
          year.

VII.  SUMMARY OF STEPS TO DETERMINE AWARDS

      *   Corporate results are calculated for each
          performance measure used.

      *   SIGECO's results are ranked in relation to the
          comparison group of utilities and the total
          incentive award is determined.  This total may
          not exceed 1.5% of SIGECO's net income for the
          plan year.

      *   The indicated award for the other participants
          may be adjusted by +/- 5% by the CEO on the basis
          of individual performance during the plan year,
          but total fund dollars available may not be
          exceeded.

      *   Recommended awards are reviewed and approved by
          the Compensation Committee and the Board of
          Directors.
 114
VIII. COMPENSATION COMMITTEE RESPONSIBILITIES

      *   The Compensation Committee has responsibility for
          approving the plan and assuring that it meets
          SIGECO's objectives.  The Committee's specific
          responsibilities include:

          1.  Approving corporate performance measures, the
              measurement scale used, and the comparison
              utilities selected.

          2.  Reviewing eligibility for plan participation.

          3.  Approving the size of the total incentive
              fund and individual levels of award
              opportunities.

          4.  Reviewing and approving the recommended
              awards for participants.

EX-12

 55
EX-12

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                   For the Five Years Ended December 31, 1993


                            1993       1992     1991      1990      1989
                                          (in thousands)
EARNINGS AS DEFINED
                                                   
Net income                $39,653    $36,767  $38,513   $37,691   $36,216
Add:
  Income Taxes:
    Current:
       Federal              5,897     13,049   14,176    12,025    13,404 
       State                1,312      2,444    2,436     1,642     2,116 
    Deferred, net:
       Federal              9,682        550    2,996     5,597     5,496 
       State                1,581        439      690     1,532       823 
    Deferred investment
     tax credit, net       (1,868)    (1,873)  (1,877)   (1,883)   (1,878)
  Interest on long-term
   debt                    18,437     17,768   18,238    18,249    18,102 
  Amortization of premium,
   discount and expense
   on debt                    773        446      740       667       714 
  Other interest              746        461      719       572     2,173 
  Interest component of
   rent expense           405        391      382       369       351 

    Earnings as defined   $76,618    $70,442  $77,013   $76,461   $77,517 

FIXED CHARGES AS DEFINED

  Interest on long-term
   debt                   $18,437    $17,768  $18,238   $18,249   $18,102 
  Amortization of premium,
   discount and expense
   on debt                    773        446      740       667       714 
  Other interest              746        461      719       572     2,173 
  Interest component of
   rent expense           405        391      382       369       351 

    Fixed charges as
     defined              $20,361    $19,066  $20,079   $19,857   $21,340 

Ratio of Earnings to
 Fixed Charges 
NOTES:
   One-third of rentals represents a reasonable
approximation of the interest factor.
   The ratios shown above do not reflect the fixed
charge component in the Company's power contract with OVEC
(see "Electric Business", page 1).  Inclusion of the
component in the computation would not have a significant
effect on the ratios.

EX-21

 56
EX-21

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                          SUBSIDIARY OF THE REGISTRANT


              Southern Indiana Properties, Incorporated in Indiana

EX-24

 60
                              February 15, 1994



Mr. R. G. Reherman
Mr. A. E. Goebel
Southern Indiana Gas and Electric Company
29 N.W. Fourth Street
Evansville, Indiana 47741

J. H. Byington, Jr., Esq.
Winthrop, Stimson, Putnam & Roberts
40 Wall Street
New York, New York 10005


Dear Gentlemen:

    Southern Indiana Gas and Electric Company will file an
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 ("Form 10-K") before April 1, 1994 which
will be accompanied by certain exhibits.

    We hereby authorize you, or any one of your, to
complete said Form 10-K and to remedy any deficiencies with
respect to said Form 10-K by appropriate amendment or
amendments; and we hereby make, constitute and appoint each
of you our true and lawful attorney for each of us and in
each of our names, places and steads, both in our individual
capacities as directors and that of officers of Southern
Indiana Gas and Electric Company, to sign and cause to be
filed with the Securities and Exchange Commission said Form
10-K, any appropriate amendment or amendments thereto, and
any exhibits thereto.

    The undersigned, Southern Indiana Gas and Electric
Company, also authorizes you and any one of you to sign said
 61
Form 10-K and any amendment or amendments thereto on its
behalf as attorney-in-fact for its respective officers, and
to file the same as aforesaid together with exhibits.

                   Very truly yours,

                   SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                   By  ( R. G. Reherman )
                    R. G. Reherman, Chairman, President and
                        Chief Executive Officer


(Melvin H. Dodson)            (R. W. Shymanski)
Melvin H. Dodson              Richard W. Shymanski


(Walter R. Emge)              (Donald E. Smith)
Walter R. Emge                Donald E. Smith


(Robert L. Koch II)           (James S. Vinson)
Robert L. Koch II             James S. Vinson


(Jerry A. Lamb)               (N. P. Wagner)
Jerry A. Lamb                 N. P. Wagner


(Donald A. Rausch)            (A. E. Goebel)
Donald A. Rausch              A. E. Goebel


(Ronald G. Reherman)          (S. M. Kerney)
Ronald G. Reherman            S. M. Kerney


(John H. Schroeder)
John H. Schroeder