October 8, 1997



Securities and Exchange Commission
Operations Center
6432 General Green Way
Alexandria, VA  22312-2413

Gentlemen:

We are transmitting herewith Indiana Energy, Inc.'s
Current Report on Form 8-K.

Very truly yours,



/s/ Douglas S. Schmidt
Douglas S. Schmidt

                           
                           
          SECURITIES AND EXCHANGE COMMISSION
                           
               Washington, D. C.  20549



                           
                           
                       FORM 8-K
                           

                    CURRENT REPORT
                           
                           
                           
        Pursuant to Section 13 or 15(d) of the
            Securities Exchange Act of 1934



Date of Report (Date of earliest event reported):   October 8, 1997


                    INDIANA ENERGY, INC.
 (Exact name of registrant as specified in its charter)


            INDIANA                1-9091              35-1654378
(State or other jurisdiction   (Commission File No.)  (IRS Employer
 of incorporation)                                    Identification Number)



1630 North Meridian Street, Indianapolis, Indiana   46202
       (Address of principal executive offices)   (Zip Code)



Registrant's telephone number, including area code: (317) 926-3351



Item 5.    Other Events

      Initiation Of Appeal Of The ProLiance Energy, LLC
      Ruling

      As reported on Form 8-K filed by Indiana Energy,
      Inc. (Energy) and Indiana Gas Company, Inc.
      (Indiana Gas) with the Securities and Exchange
      Commission, on September 12, 1997, the Indiana
      Utility Regulatory Commission (IURC) issued its
      decision in the complaint proceeding brought by a
      small group of large volume customers (Petitioners)
      of Indiana Gas and Citizens Gas & Coke Utility
      (Citizens) relating to the gas supply and portfolio
      administration agreements between ProLiance Energy,
      LLC (ProLiance) and Indiana Gas and ProLiance and
      Citizens.  The IURC concluded that these agreements
      are consistent with the public interest.  The
      management of Energy believes that the decision is
      supportive of the utilities' relationship with
      ProLiance in all material respects.  ProLiance is
      an Indianapolis, Indiana based marketer of energy
      and related services and was formed in March of
      1996 by affiliates of Energy and Citizens.
      
      The IURC's decision suggests that all material
      provisions of the agreements between ProLiance
      and the utilities are reasonable.  In the
      decision the IURC acknowledged that the
      utilities' purchases of gas commodity from
      ProLiance at index prices, as compared to
      ProLiance's actual cost, is not unreasonable.
      The IURC also acknowledged that the amounts paid
      by ProLiance to the utilities for the prospect of
      using pipeline entitlements if and when they are
      not required to serve the utilities' firm
      customers, and the fees paid by the utilities to
      ProLiance for portfolio administration services
      are not unreasonable.  Nevertheless, with respect
      to each of these matters, the IURC concluded that
      additional findings in the gas cost adjustment
      process would be appropriate and directed that
      these matters be considered further in the
      pending, consolidated gas cost adjustment
      proceeding involving Indiana Gas and Citizens.
      The IURC has not yet established a schedule for
      conducting these additional proceedings.
      
      On October 6, 1997, counsel for Indiana Gas was
      served with certain filings made with the Indiana
      Court of Appeals (Court) by the Petitioners and
      the Indiana Office of Utility Consumer Counselor
      (OUCC).  The effect of these filings is to
      initiate an appeal of the IURC's decision by  the
      Petitioners and the OUCC.
      
      Pursuant to the procedure governing appeals of
      IURC decisions, at this time neither the
      Petitioners nor the OUCC have indicated on what
      basis they will attempt to challenge the IURC's
      decision.  The schedule for the appeal proposed
      by the Petitioners and the OUCC indicates that
      the earliest they will likely disclose such a
      basis would be on January 12, 1998, when they
      would be obligated to file the IURC's record of
      proceedings with the Court.
      
      As a result of the IURC's decision and
      notwithstanding the initiation of the appeal,
      Energy has determined that a substantial portion
      of the reserve it had previously recorded for
      earnings associated with ProLiance's gas supply
      and gas marketing business would be adjusted
      downward.  This has had the effect of increasing
      Energy's 1997 net income by approximately $3
      million.
      
      Although Indiana Gas' management believes that
      based upon applicable Indiana law and the IURC's
      record of proceedings in the ProLiance case the
      IURC's decision should be upheld by the Court,
      there can be no assurance as to that outcome.

                      SIGNATURES

   Pursuant to the requirements 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.


                                 INDIANA ENERGY, INC.
                                    Registrant




Dated October 8, 1997    /s/Niel C. Ellerbrook
                         Niel C. Ellerbrook
                         President and Chief Operating Officer



Dated October 8, 1997    /s/Jerome A. Benkert
                         Jerome A. Benkert
                         Vice President and Controller