EX-18

November 27, 1995

Southern Indiana Gas & Electric Company
20 North West Fourth Street
Evansville, Indiana 47741

Re:  Form 10-Q Report for the quarter ended March 31, 1995

Dear Gentlemen:

This letter is written to meet the requirements of
Regulation S-K calling for a letter from a registrant's
independent accountants whenever there has been a change in
accounting principle or practice.

We have been informed that, as of January 1, 1995, the
Company changed from the billed method of accounting for
revenues to the unbilled method.

A complete coordinated set of financial and reporting
standards for determining the preferability of accounting
principles among acceptable alternative principles has not
been established by the accounting profession.  Thus, we
cannot make an objective determination of whether the change
in accounting described in the preceding paragraph is to a
preferable method.  However, we have reviewed the pertinent
factors, including those related to financial reporting, in
this particular case on a subjective basis, and our opinion
stated below is based on our determination made in this
manner.

We are of the opinion that the Company's change in method of
accounting is to an acceptable alternative method of
accounting, which, based upon the reasons stated for the
change and our discussions with you, is also preferable
under the circumstances in this particular case.  In
arriving at this opinion, we have relied on the business
judgment and business planning of your management.  

We have not audited the application of this change to the
financial statements of any period subsequent to December
31, 1994.  Further, we have not examined and do not express
any opinion with respect to your financial statements for
the three months ended March 31, 1995.

Very truly yours,
Arthur Andersen LLP
ARTHUR ANDERSEN LLP