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IPALCO SEC Letter Response

August 11, 2005

Mr. George Ohsiek

Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

	RE: 	IPALCO Enterprises, Inc.

		Form 10-K for Fiscal Year Ended December 31, 2004

		Filed March 24, 2005

		Form 10-Q for Fiscal Quarter Ended March 31, 2005

		File No. 1-8644

Dear Mr. Ohsiek:

We have received your comment letter dated July 28, 2005, addressed to Mr. Barry J. Sharp,
Executive Vice President and Chief Financial Officer of The AES Corporation.  The comments in your
letter addressed filings of IPALCO Enterprises, Inc. as well as filings of AES Ironwood, LLC, AES
Red Oak, LLC and AES Eastern Energy, LP.  This letter provides responses to comments concerning
IPALCO Enterprises, Inc. ("IPALCO") only.  The responses related to the other referenced
registrants will be addressed by the other referenced registrants individually.  This letter
includes your comments in italics and then our response directly following the comment.

Form 10-K for Fiscal Year Ended December 31, 2004

Report of Independent Registered Public Accounting Firm, page 42

2.	The "Report of Independent Registered Public Accounting Firm" appears unsigned on
the EDGAR version of your Form 10-K for AES Ironwood, LLC and IPALCO Enterprises, Inc.  Please
provide us with a copy of the original signed reports.

An original signed copy is included with the mailed correspondence.

Item 9A. Controls and Procedures, page 57

5.	We note your disclosure that your principal executive officer and principal financial
officer, "conclude that as of December 31, 2004, [your] disclosure controls and procedures were
effective to provide reasonable assurance that material information relating to [you] and [your]
consolidated subsidiaries is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms."  Revise to clarify, if
true, that your officers concluded that your disclosure controls and procedures
are also effective to ensure that information required to be disclosed in the reports that you
file or submit under the Exchange Act is accumulated and communicated to your management, including
your chief executive officer and chief financial officer, to allow timely decisions regarding
required disclosure.  See Exchange Act Rule 13a-15(e).  Please also revise your Item 9A disclosure
for AES Red Oak, LLC, IPALCO Enterprises, Inc. and AES Eastern Energy, LP.

We will revise future filings, as applicable, to include
that our officers concluded that our disclosure controls and procedures are also effective to ensure
that information required to be disclosed in the reports that we file or submit under the Exchange
Act is accumulated and communicated to management, including the chief executive officer and
chief financial officer, to allow timely decisions regarding required disclosure.

7.	As you disclose that most of IPL's non-union employees receive options to purchase
shares of AES common stock under the AES Long Term Compensation Plan and that employees of AES
Eastern Energy, LP participate in the AES Stock Option Plan, we assume you apply the guidance in
paragraph 14 of FIN 44 to account for such options.  If so, tell us why you did not provide all
disclosures required by paragraphs 46-48 of SFAS 123.  If you agree that such disclosure is
necessary, please also provide the disclosure required by paragraph 45 of SFAS 123, as amended by
paragraph 2.e of SFAS 148 under "Summary of Significant Accounting Policies" in Note 1.
See paragraph 15 of SFAS 123.

Effective January 1, 2003, the Company adopted the fair value recognition provision of SFAS
No. 123, as amended by SFAS No. 148, prospectively to all employee awards granted,
modified or settled after January 1, 2003.  Stock options are valued at the date of grant using
the Black-Scholes method and charged to income ratably over their vesting period.

Expenses related to such options of $0.4 million, $0.1 million and $0 are included in the
statements of operations for the years ended December 31, 2004, 2003 and 2002, respectively.
After considering the impact of income taxes, the stock option expense is 0.2%,
0.0% and 0.0% of net income for 2004, 2003 and 2002, respectively. Due to the amount of the
related expense in relation to the financial statements of IPALCO, the disclosure provisions of SFAS
123 are not considered necessary as SFAS 123 states that "provisions of this statement need not
be applied to immaterial items."

Though it was not required, IPALCO elected to provide a general description of the provisions of
the plan. Subsequently, we decided to no longer make this elective disclosure and it therefore was
not included in our Form 10-Q for the period ended March 31, 2005.  The disclosure provisions of
SFAS 123 will be included in future filings, as applicable, if the Company deems the impact of the
accounting for stock options granted to IPL's non-union employees to be material.

Note 5. Regulatory Assets

8.	If any portion of your regulatory asset balance includes amounts on which you do not earn a
current return, disclose the nature and amount of each asset and its remaining recovery period.  We
believe the best practices approach regarding regulatory assets is to affirmatively indicate whether
a particular regulatory asset is earning a rate of return and the anticipated recovery period.  For
regulatory assets that are not currently being recovered, explain to us why you believe they are
probable of recovery in the future.  Refer to the requirements of paragraph 20 of SFAS 71.

We will revise future filings, as applicable and if material, to include the disclosure
provisions of SFAS 71, paragraph 20.  Specifically, we will disclose any regulatory asset balance on
which we do not earn a current return by amount, the nature of the asset and its remaining recovery
period.

We had $8.6 million and $7.8 million of regulatory assets at March 31, 2005 and December 31,
2004, respectively, that are currently not being recovered.  These consist of administrative
costs from Indianapolis Power & Light Company's participation in the Midwest ISO
("MISO") market. We received an order from the Indiana Utility Regulatory Commission that
granted authority for the deferral of MISO administrative costs for recovery in a future base rate
case.

Note 6.  Commitments and Contingencies

9.	With regard to being named as a defendant in 113 pending asbestos related lawsuits, you
indicate that you do not believe that any of the pending asbestos suits in which IPL is a defendant
will have a material adverse effect on IPALCO's business or operations.  A statement that these
contingencies are not expected to be material does not satisfy the requirements of SFAS 5 if there
is at least a reasonable possibility that a loss exceeding amounts already recognized may have been
incurred and the amount of that additional loss would be material to a decision to buy or sell
securities.  In that case, you must either (a) disclose the estimated additional loss, or range of
loss, that is reasonably possible or (b) state that such an estimate cannot be made.  Refer to SFAS
5 and SAB Topic 5:Y.  Tell us whether you believe that there are reasonably possible material
additional losses with regard to the asbestos lawsuits.  Tell us what consideration you have given
to the detail disclosure requirements of Interpretive Responses to Questions 2 and 3 of SAB Topic
5:Y.  Please amend your filing to address our concerns or tell us why no amendment is necessary.

 We considered Question 2 of SAB Topic 5:Y and believe the disclosure requirements thereunder
do not apply to our situation because the lawsuits pending against IPL allege personal
injury or wrongful death and do not constitute product or environmental remediation liabilities.

There is a reasonable possibility that material additional loss with regard to the asbestos
lawsuits could be incurred.  In accordance with the disclosure provisions of SFAS 5 and SAB Topic
5Y, we either must disclose the estimated additional loss or range of loss that is reasonably
possible or disclose that such an estimate cannot be made. At this time, an estimate cannot be
made.
Question 3 of SAB Topic 5:Y, also states that disclosure of the number of claims pending
at each balance sheet date, the number of claims filed for each period presented, the number
of claims dismissed, settled, or otherwise resolved for each period, and the average
settlement amount per claim may be necessary. Because the sum total of all claims settled to
date have not been material, we believe it is unnecessary to disclose the nature of the claim
activity. We believe disclosure of the number of claims pending at each balance sheet date
and a statement that the total claims settled to date were not material to our financial
position or results of operations, or cash flows, is sufficient.

We will disclose the following in our quarterly report on Form 10-Q for the six month period
ended June 30, 2005.

As of June 30, 2005 and December 31, 2004 IPL is a defendant in
112 and 113 pending lawsuits, respectively,
alleging personal injury or wrongful death stemming from exposure to asbestos and asbestos
containing products formerly located in IPL power plants. IPL has been named as a "premises
defendant" in that IPL did not mine, manufacture, distribute or install asbestos or asbestos
containing products. These suits have been brought on behalf of persons who worked for contractors
or subcontractors hired by IPL. IPL has insurance which may cover some portions of these claims;
currently, these cases are being defended by counsel retained by various insurers who wrote policies
applicable to the period of time during which much of the exposure has been alleged.

IPL has settled a
number of asbestos related lawsuits for amounts which, individually and in the aggregate, are not
material to IPL or IPALCO's financial position or results of operations, or cash flows.
Historically, settlements paid on IPL's behalf have been comprised of proceeds from one or more
insurers along with comparatively smaller contributions by IPL. Although we do not believe that any
of the pending asbestos suits in which IPL is a named defendant will have a material adverse effect
on IPALCO's business or operations, we are unable to estimate the number of, the effect of, or
losses or range of loss which are reasonably possible from, these or any additional asbestos suits.
Furthermore, we are unable to estimate the portion of a settlement amount, if any, that may be paid
from any insurance coverage for any know or unknown claims. Accordingly, we cannot assure that the
pending or any additional suits will not have a material adverse effect on IPALCO's consolidated
financial statements.

No amendment to our Form 10-K for the annual period ended December 31, 2004 or to our Form 10-Q
for the quarterly period ended March 31, 2005 is necessary.  Article 10-01(a)(5) of regulation S-X
allows registrants in the preparation of financial statement disclosures to presume readers of the
interim financial statements have access to the most recent annual financial statements in order to
provide disclosure surrounding significant changes since the most recent annual report except in the
context of material contingencies.

As the standard for disclosures of material contingencies is the same in interim period reporting
as annual period reporting, the quarterly report as filed on Form 10-Q for the six month period
ended June 30, 2005
will provide readers of the financial statements complete and accurate disclosure of material
contingencies as required by SFAS 5 and SAB Topic 5:Y.

In connection with responding to your comments, we acknowledge

the company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filing; and

the company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.

If we can provide any further information or if the staff would like to discuss our
responses, please call me at 317-261-8561 or our Controller, Frank Marino, at 317-261-8700.

Sincerely,

/s/ Hamsa Shadaksharappa

Hamsa Shadaksharappa

Senior Vice President - Financial Services,

Chief Financial Officer, Secretary and Director