SECURITIES AND EXCHANGE COMMISSION

                    WASHINGTON, D.C.  20549

                           FORM 10-K

       Annual Report Pursuant to Section 13 or 15 (d) of
              the Securities Exchange Act of 1934

          For the fiscal year ended December 31, 1998
                   Commission File No. 1-9874

              MIDAMERICAN ENERGY HOLDINGS COMPANY
        (the successor in interest to CalEnergy Company, Inc.)
     (Exact name of registrant as specified in its charter)

     Iowa                               94-2213782
(State or other jurisdiction of      (I.R.S. Employer
incorporation  or organization)      Identification No.)

 666 Grand Avenue, Des Moines, IA               50309
(Address of principal executive offices)     (Zip Code)

Registrant's telephone number, including area code:  (515) 242-4300

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

                                            Name of exchange
  Title of each class                       on  which registered
Common Stock, No                            New York Stock Exchange
par value ("Common Stock")                  Pacific Stock Exchange
                                            London Stock Exchange

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

      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

      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.   [ ]

      Based on the closing sales price of Common Stock on the New York
Stock  Exchange on March 29, 1999 the aggregate market  value  of  the
Common Stock held by non-affiliates of the Company was $1,644,091,283.

      58,848,905 shares of Common Stock were outstanding on March 29,
                                 1999.

DOCUMENTS INCORPORATED BY REFERENCE

Incorporated by reference into this Form 10-K, in response to Item 3
Part I, Items 6 through 8 of Part II and Items 10 through 13 of Part
III, are the portions indicated herein of (i) the annual report of
CalEnergy Company, Inc. (the "Company") to security holders for the
fiscal year ended December 31, 1998 (the "Annual Report"), and (ii) the
Company's proxy statement dated on or about April 3, 1999 for the
annual meeting of stockholders to be held on May 20, 1999 (the "Proxy
Statement").
                                   
<PAGE>                                
                        TABLE OF CONTENTS
                                
PART I                                                          1
ITEM 1.  BUSINESS                                               1
GENERAL                                                         2
RECENT ACQUISITIONS                                             2
STRATEGY                                                        3
 THE GLOBAL ENERGY MARKET                                       6
 THE UNITED STATES                                              6
 THE UNITED KINGDOM                                             8
THE COMPANY'S DISTRIBUTION AND SUPPLY BUSINESS                 10
 MIDAMERICAN ENERGY COMPANY                                    10
 NORTHERN ELECTRIC                                             13
PROJECTS IN OPERATION                                          17
 UNITED STATES POWER GENERATION                                17
 MIDAMERICAN ENERGY GENERATION FACILITIES                      17
 CE GENERATION GAS FACILITIES                                  19
 OTHER U.S. GEOTHERMAL INTERESTS                               21
 UNITED KINGDOM POWER GENERATION                               21
 THE PHILIPPINES POWER GENERATION                              21
PROJECTS IN CONSTRUCTION                                       24
 UNITED STATES                                                 24
 PHILIPPINES                                                   24
 INDONESIA                                                     26
PROJECTS IN DEVELOPMENT                                        26
 UNITED STATES                                                 26
 UNITED KINGDOM                                                27
PRODUCING GAS FIELD OPERATIONS AND FIELDS IN DEVELOPMENT       27
THE COMPANY'S PRODUCING GAS FIELD OPERATIONS AND FIELDS IN
DEVELOPMENT                                                    28
 PROJECTS FIELDS IN DEVELOPMENT                                29
REGULATORY, ENERGY AND ENVIRONMENTAL MATTERS                   29
 UNITED STATES                                                 30
 UNITED KINGDOM                                                31
 EMPLOYEES                                                     32
ITEM 2.PROPERTIES                                              32
ITEM 3.  LEGAL PROCEEDINGS                                     33
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS   33
PART II                                                        34
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER'S MATTERS                                          34
ITEM 6. SELECTED FINANCIAL DATA                                36
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS                            36
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET
RISK                                                           36
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA            36
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE                            36
PART III                                                       37
MANAGEMENT                                                     37
ITEM 10.  DIRECTORS, EXECUTIVE AND OTHER OFFICERS OF THE COMPANY
AND SIGNIFICANT SUBSIDIARIES                                   37
PART IV                                                        44
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K                                                       44
SIGNATURES                                                     46
EXHIBIT INDEX                                                  48
<PAGE>
                             PART I
                                
Item 1.  Business

General

      MidAmerican  Energy  Holdings  Company,  the  successor  in
interest to CalEnergy Company, Inc. (the "Company" or "MEHC"), is
a   fast-growing  global  energy  company  with  an  increasingly
diversified portfolio of regulated and non-regulated assets.  The
focus  of the Company has evolved over time from development  and
acquisition  activities in the domestic and  international  power
generation   markets  to  strategic  electric  and  gas   utility
acquisitions,  with  a  particular emphasis  on  investment-grade
countries  such  as  the  United  States,  the  United   Kingdom,
Australia,  Canada, New Zealand and certain of the  countries  of
Western  Europe.  This  focus  has  provided  the  Company   with
increased  scale,  skill,  revenue  diversity,  credit   quality,
quality  of  cash flows and growth opportunities associated  with
each of the acquired businesses.  The Company was founded in 1971
and, through its subsidiaries, manages and owns interests in over
10,000  megawatts  ("MW")  in 33 power generation  facilities  in
operation, construction and development worldwide.  In  addition,
through    its    subsidiaries,   MidAmerican   Energy    Company
("MidAmerican  Energy"  or  "MEC")  and  Northern  Electric   plc
("Northern"), the Company currently serves more than 3.37 million
customers worldwide (2.15 million electricity customers and  1.22
million  natural gas customers) following the completion  of  the
MidAmerican Merger in March, 1999.  For additional information on
MidAmerican  Energy, see its Annual Report on Form 10-K  for  the
year  ended December 31, 1998, File No. 1-11505. The Company  has
achieved significant growth in earnings and assets over the  past
five   years  through:  (i)  acquisitions  that  complement   and
diversify the Company's existing business, broaden the geographic
locations  of and fuel sources used by its projects  and  enhance
its  competitive capabilities; (ii) enhancement of the  financial
and  technical performance of existing and acquired projects; and
(iii)  development and construction of new plants and  facilities
("greenfield  development").   The  Company's  Senior   unsecured
obligations have received investment grade ratings of Baa3,  BBB-
and   BBB-  from  Moody's  Investor  Services  Inc.  ("Moody's"),
Standard & Poors Ratings Services (S&P) and Duff & Phelps  Credit
Rating  Company  (DCR).  The Company's utility  subsidiaries  are
also investment grade rated by Moody's, S&P and DCR:  MidAmerican
Energy (A3, A- and A+) and Northern (A3, A- and A).

      The  market capitalization of the Company has  risen  at  a
compound  annual rate of 33% from approximately $498  million  in
December 1994 to approximately $1.644 billion in March 1999,  the
revenues of the Company have risen at a compound annual  rate  of
95% from approximately $186 million in 1994 to approximately $2.7
billion  in  1998 and net income available to common stockholders
excluding  extraordinary  item and the  cumulative  effect  of  a
change  in  accounting principle has risen at a  compound  annual
rate   of   42%  from  approximately  $34  million  in  1994   to
approximately $138 million in 1998. From 1994 through  1998,  the
Company's  EBITDA and total assets have increased by  a  compound
annual  growth rate of 65% and 68%, respectively. EBITDA for  the
year  ended  December 31, 1998 was $953 million.  "EBITDA"  means
the  Company's earnings, before interest, taxes, depreciation and
amortization.   Information concerning EBITDA is  presented  here
not as a measure of operating results, but rather as a measure of
the  Company's  ability to service debt.  EBITDA  should  not  be
construed  as  an  alternative  to either  (i)  operating  income
(determined  in  accordance  with Generally  Accepted  Accounting
Principles  ("GAAP")) or (ii) cash flow from operating activities
(determined  in  accordance with GAAP).  In this  Annual  Report,
references  to "U.S. dollars," "dollars," "US $," "$" or  "cents"
are  to  the  currency  of the United States  and  references  to
"pounds  sterling", "pounds," "sterling," "pence" or "p"  are  to
the currency of the United Kingdom.

      The  Company's  Common  Stock is traded  on  the  New  York
(trading symbol:  MEC), Pacific and London Stock Exchanges.   The
principal  executive offices of the Company are  located  at  666
Grand Avenue, Des Moines, Iowa 50309 and its telephone number  is
(515)  242-4300.  The Company was initially incorporated in  1971
under  the  laws  of  the  State of Delaware.   The  Company  was
reincorporated  in  1999 in Iowa in connection  with  the  recent
MidAmerican Merger described below.

Recent Acquisitions
<PAGE>
      Beginning  in  1995,  the Company has  consummated  several
significant   acquisitions,  which  have  been   integrated   and
immediately  accretive to earnings. In January 1995, the  Company
acquired Magma Power Company ("Magma"), a publicly-traded  United
States  independent power producer with 228 net MW  of  operating
capacity  and 154 net MW of ownership capacity, for approximately
$958  million. The Magma acquisition, combined with the Company's
previously  existing assets, made the Company at  that  time  the
world's  largest independent geothermal power producer (based  on
the  Company's  estimate of aggregate MW of  electric  generating
capacity in operation and construction).

      In  April  1996,  the Company completed  the  purchase  for
approximately  $70  million of its partner's  interests  in  four
electric  generating plants in Southern California, resulting  in
sole  ownership of the Imperial Valley Projects' 228  net  MW  of
aggregate operating capacity.

      In  August  1996,  the  Company  acquired  Falcon  Seaboard
Resources,  Inc.  ("Falcon  Seaboard")  for  approximately   $226
million, thereby acquiring significant ownership in 520 net MW of
natural gas-fired electric production facilities located  in  New
York,  Texas  and  Pennsylvania and a  related  gas  transmission
pipeline.

      In  December 1996, the Company acquired a majority  of  the
common shares of Northern. Northern is one of the twelve regional
electricity  companies (each, a "REC") which came into  existence
as  a result of the restructuring and subsequent privatization of
the  electricity industry in the United Kingdom ("U.K.") in 1990.
Northern  distributes electricity in its authorized area  located
in  northeast  England which covers approximately  14,400  square
kilometers  and  has  a population of approximately  3.2  million
people.  Northern also supplies electricity and  gas  inside  and
outside its authorized area and currently owns interests in  four
producing gas field operations in the North Sea.

      On  January 2, 1998, the Company completed the purchase  of
Kiewit  Diversified Group's ("KDG") ownership interest in various
project  partnerships and common shares of the Company (the  "KDG
Acquisition")  for a cash price of approximately $1,160  million,
including  transaction costs.  KDG's ownership  interest  in  the
Company  comprised  20,231,065 shares of common  stock  (assuming
exercise  by KDG of one million options to purchase the Company's
shares), a 30% interest in Northern Electric plc ("Northern"), as
well  as  the  following minority project interests:  Mahanagdong
(45%), Casecnan (35%), Dieng (47%), Patuha (44%), Bali (30%)  and
other interests in international development stage projects.

      On  August 11, 1998, the Company entered into an  Agreement
and  Plan  of  Merger  with MidAmerican Energy  Holdings  Company
("MidAmerican").  The MidAmerican Merger closed on March 12, 1999
and the Company paid $27.15 in cash for each outstanding share of
MidAmerican  common  stock  for a total  of  approximately  $2.42
billion  in  a  merger, pursuant to which MidAmerican  became  an
indirect  wholly owned subsidiary of the Company.   Additionally,
the  Company  reincorporated in the State of  Iowa,  was  renamed
MidAmerican  Energy Holdings Company and upon closing  became  an
exempt public utility holding company.

      The  consummation of the MidAmerican Merger was conditioned
upon  receipt of a number of regulatory and shareholder approvals
and  the  disposition  of partial interests  in  certain  of  the
Company's  power generating facilities in order to  maintain  the
qualifying facilities status of such independent power generating
facilities.  On February 26, 1999, the Company closed the sale of
all  of  its  ownership interests in the Coso Joint  Ventures  to
Caithness  Energy LLC.  The price includes $205 million  in  cash
and  $5  million  in contingent payments plus the  assumption  of
approximately $67.7 million in debt.  On February  8,  1999,  the
Company  created  a  new  subsidiary,  CE  Generation  LLC   ("CE
Generation")  and subsequently transferred its  interest  in  the
Imperial  Valley  Projects  and Gas  Projects  (both  as  defined
herein) to CE Generation.  On March 2, 1999, CE Generation closed
the sale of $400 million aggregate principal amount of its 7.416%
Senior  Secured  Bonds due 2018.  On March 3, 1999,  the  Company
closed  the  sale  of  50%  of  its  ownership  interests  in  CE
<PAGE>
Generation  to  an  affiliate of El Paso Energy  Corporation  for
approximately  $247 million in cash, $6.5 million  in  contingent
payments and $23.5 million in equity commitments.  Including  the
gross  proceeds  from  the  CE  Generation  debt  offering,   the
aggregate consideration was approximately $677 million.

Strategy

      The  Company's  growth strategy remains focused  on  taking
advantage  of  the  investment  opportunities  created   by   the
continuing  restructuring  and privatization  in  energy  sectors
throughout the world. In order to effectively execute its  growth
strategy,  the  Company  has  organized  its  operations  into  a
functional  structure.  The functional alignment is  believed  to
allow   for   greater  efficiencies  in  operations  and   better
coordination  and asset utilization in developing  the  Company's
business.

      The  Company's strategy is comprised of the  following  key
elements:

     *    Growth through International and Domestic Acquisitions. The
       Company has successfully completed six acquisitions in the past
       four years, each of which was accretive to earnings. The Company
       believes  several of these acquisitions provided  it  with
       specialized skills and experience that enhance its competitive
       position in the areas it has targeted for future growth. For
       example, the Company's acquisition of Northern, a U.K. regional
       electricity company engaged in electricity distribution and
       supply and gas supply and related businesses, was the first step
       in its planned expansion into those sectors in the U.S. and
       elsewhere throughout the world. In addition, since the U.K.
       progressively deregulated its electricity and gas supply sectors,
       the Company believes that its Northern management team has the
       knowledge and skills to compete in a competitive supply market.
       By  virtue of its ownership of Northern, the Company  also
       possesses the sophisticated billing and proprietary information
       systems  that are believed by the Company to be critically
       important components of the skill and technology base necessary
       to compete effectively in a restructured environment.  More
       recently, the Company completed the acquisition of MidAmerican
       Energy,  a leading regional provider of energy and related
       services in Iowa and three neighboring states.

             The  Company believes that the electricity  industry
       in  the U.S. will also progressively restructure over  the
       next  three  to  five  years and will largely  follow  the
       regulatory  model established in the U.K. (with  incentive
       based  rates  or price caps). As currently regulated  U.S.
       electricity   distributors   and   electricity   and   gas
       suppliers  attempt  to  rationalize  their  businesses  to
       maintain profitability in a price competitive market,  the
       Company  believes that opportunities will become available
       to  low cost and reliable providers of energy services  to
       gain  market share in energy supply and provide additional
       services   to   competitors   (such   as   utility    line
       construction and maintenance services, metering,  customer
       billing  and information systems services).  As a  result,
       the  Company  believes that by acquiring  a  U.S.  utility
       operation such as MidAmerican Energy and transferring  the
       knowledge, skills and systems gained at Northern,  it  can
       create  a  platform from which a U.S. energy  distribution
       and  supply  business  can be profitably  established  and
       expanded in a competitive market.

     *    Growth through Greenfield Development of Energy Projects.
       As part of the recent acquisition of MidAmerican, the Company has
       commenced development of a 500 MW natural gas fired generation
       facility which would sell power on a partial contract and partial
       merchant basis.  The facility is expected be located near the
       Quad Cities in Illinois and Iowa on the border of two electric
       reliability districts, the Mid-Continent Area Power Pool and the
       Mid-America Interconnection Network.  In addition, the Company
       continues to view the international power generation sector as an
       attractive market for the development of new greenfield energy
       opportunities, an area in which it has demonstrated substantial
       expertise. In the past four years, the Company has developed and
       financed four new Philippine power projects, three of which are
       now operating and the fourth of which is under construction and
<PAGE>      
       on schedule and within budget.  With CalEnergy Gas UK, a wholly
       owned subsidiary of Northern, the Company has expanded its
       development strategy to include integrated generation  and
       upstream natural gas operations. The addition of gas exploration,
       production and technical storage capabilities allows the Company
       to expand its number of target markets throughout the world. In
       addition, utilization of its geotechnical expertise in this
       manner  allows early entrance with limited upfront capital
       expenditures into markets in which the Company  might  not
       otherwise have power development opportunities. The integration
       of power generation plants with the upstream gas sources in
       competitive energy markets will also produce market arbitrage
       opportunities to sell either gas or electricity depending upon
       market conditions at the time. The Company continues to develop
       two upstream gas projects, one in Western Australia at the Gingin
       field in the Perth Basin and one in Poland at the large Pila
       Concession.

     *    Profit Enhancement through Operating Efficiencies while
       Maintaining Quality and Reliability of Service.  The Company
       aggressively  pursues  profitability improvements  through
       efficiency and productivity gains at existing operations.  The
       cost of production per kWh at the Imperial Valley Projects (as
       defined herein) has declined from 5.3 cents/kWh in 1994 to 2.8
       cents/kWh in 1998. The Company has achieved these efficiencies
       while maintaining high reliability and safety in its operation.
       Through continuing advancements in drilling technology, reservoir
       modeling and well maintenance techniques, the production capacity
       of new and existing wells has been improved or maintained and, as
       a result, the useful output of the various geothermal resources
       has been improved or maintained.

     *     Continued  Diversification of Revenue  Base  and  Fuel
       Sources. The Company believes that following the MidAmerican
       Merger it has a diversified revenue base, distributed among its
       ownership of two operating electricity and gas utilities, its
       ownership of interests in thirty-three projects with 10,000 net
       MW in operation, under construction or in development and its
       ownership of producing gas fields (all as described in more
       detail below).  In addition to the revenues of MidAmerican Energy
       and Northern, which are largely derived from their electricity
       distribution and electricity and gas supply activities,  a
       significant portion of the Company's revenues will be from its
       50% equity ownership interest in CE Generation, the project
       subsidiaries of which have long-term contracts with seven large
       U.S. utility companies, and the Company's subsidiaries' long-term
       contracts with the Government of the Philippines (sovereign
       ratings of Ba1/BB+).  The Company intends to seek continued
       diversification of its revenue base and fuel sources through
       acquisitions and greenfield development.

     *     Maintenance  of Prudent Financial and Risk  Management
       Practices. The Company has consistently maintained, and intends
       in  the  future to maintain what it believes to be prudent
       financial and risk management practices. A primary objective of
       the Company is to structure project financings for development
       projects which can be rated investment grade by Moody's, DCR and
       S&P. The Company's senior unsecured obligations are rated Baa3,
       BBB- and BBB-.  Its MidAmerican Energy subsidiary is rated A3, A+
       and A-; Salton Sea Funding Corp. is rated Baa2/BBB; CE Generation
       LLC is rated Baa3, BBB and BBB-; its Northern Electric subsidiary
       is rated A3, A and A-, and its CE Electric UK Funding Company
       subsidiary's senior notes are rated Baa1, A- and A-.  The debt
       ratings reflected above have been published by Moody's, DCR (for
       all except Salton Sea Funding) and S&P, respectively, in respect
       of certain senior indebtedness of the respective issuers shown.
       These ratings may be changed from time to time by the ratings
       agencies. The project financing structures utilized to date by
       the Company include as a fundamental protection for the Company's
       other  assets  the requirement that (with certain  minimal
       exceptions) the funds borrowed and other obligations for the
       purpose of financing or operating a project are to be primarily
       or entirely under loan agreements, project agreements and related
       documents which provide that the obligations and loans are to be
       performed or repaid solely by the project and from the project's
       revenues and that the security granted to secure the loan and
       other obligations be limited to the capital stock, assets,
       contracts and cash flow of the project or the project holding
       company. Under this type of structure, the lenders and other
       project contracting parties cannot seek recourse against the
       Company or its other subsidiaries or projects. The Company
       intends to continue to structure future projects in a manner
       which minimizes the exposure of the Company's other assets
       through appropriate non-recourse project structures.
<PAGE>
     *      Continued  Adherence  to  Strict  Project  Evaluation
       Criteria. The Company intends to operate only in those countries
       where economic fundamentals are believed to be attractive and
       risks can be contractually mitigated or adequately covered by
       insurance. The Company's international investment criteria
       generally includes giving due consideration, where appropriate,
       to the following:
          /  Sovereign guarantees;
          /    Significant   demand  for  new  power   generating
facilities;
          /    An   established   legal  system   providing   for
enforceability of contracts and regulations;
          /   "Take or Pay" contracts with utilities, governments
           or  other  parties  with  acceptable  creditworthiness
           which  provide for primarily US$-denominated  payments
           and    certain   contractual   protections   regarding
           currency convertibility and transferability;
          /    Fixed-price   date-certain,  turnkey  construction
           contracts  with  liquidated  damages  and  performance
           security provisions; and
          /  Availability of political risk insurance.
          
       The  Company  intends to continue to focus primarily  upon
       those  development opportunities where  it  is  permitted,
       directly  or  indirectly, to acquire a majority  ownership
       interest  and exercise operational control over the  newly
       developed or acquired projects.


                    The Global Energy Market

      The opportunity for independent power generation and energy
distribution and supply has expanded from a United States  market
to  a  global  competitive market as many foreign countries  have
initiated restructuring and privatization policies that encourage
the  development of independent power generation and  independent
distribution and supply of energy. Internationally, large amounts
of  new  electric  power  generating  capacity  are  required  in
developing countries. The movement toward privatization  in  some
developing countries has created significant new markets  outside
the  United  States.  The need for rapid economic  expansion  has
caused  many  countries to select private  power  development  as
their   only  practical  alternative  and  to  restructure  their
legislative   and   regulatory   systems   to   facilitate   such
development. The Company believes that the significant  need  for
power in developing markets has created strong local support  for
private  power  projects  in  many  foreign  countries  and   has
increased   the   availability  of  attractive  long-term   power
contracts. The Company intends to take advantage of opportunities
in  these  markets  and to develop, construct and  acquire  power
generation,  distribution and supply and related energy  projects
meeting its strategic criteria outside the United States.

        In   addition,   as   privatization,   deregulation   and
restructuring  initiatives are enacted in various  countries  and
states,   the  Company  has  identified  a  number  of  promising
opportunities  to  acquire  power  generation,  distribution  and
supply  assets,  as  well as other energy related  infrastructure
assets.  These  opportunities include  bidding  opportunities  in
connection with privatization initiatives in the electricity  and
gas  distribution  and  supply sectors  in  various  regions  and
countries, including principally Europe, South America, Australia
and  New  Zealand.  The  Company expects  to  see  more  of  such
acquisition opportunities in additional markets in the future.

      In pursuing its strategy, the Company presently intends  to
focus upon development and acquisition opportunities in countries
possessing  characteristics  which  meet  the  Company's  general
investment criteria. At the present time, the Company  is  active
in  the United States, the Philippines and the United Kingdom and
is  pursuing  development  opportunities  in  Australia,  Canada,
Europe, New Zealand and South America. Set forth below is certain
general  information concerning the present status of the  energy
markets  in  those countries in which the Company  currently  has
significant operations.

     The United States
<PAGE>
      In  the  United  States,  the  independent  power  industry
expanded  rapidly in the 1980s, facilitated by the  enactment  of
the Public Utilities Regulatory Policies Act ("PURPA"). PURPA was
enacted to encourage the production of electricity by non-utility
companies (frequently referred to as independent power companies)
as well as to lessen reliance on imported fuels. According to the
Utility   Data   Institute,  independent  power  producers   were
responsible  for the installation of approximately 30,000  MW  of
capacity,  or  50%,  of  the  United States  electric  generation
capacity that has been placed in service since 1988. However,  as
the size of the United States independent power market increased,
available domestic power capacity and competition in the industry
also  significantly  increased and the need  for  new  generating
capacity has been reduced.

      During  the last few years, many states began to accelerate
the  movement  toward  more competition in many  aspects  of  the
electric   power  market,  including  generation,   transmission,
distribution and supply. Extensive federal and state  legislative
and  regulatory reviews are presently underway in  an  effort  to
further  such competition. In particular, the state of California
has  adopted  a  bill  to restructure the  electric  industry  by
providing  for a phased-in competitive power generation industry,
with  a  power exchange and independent system operator, and  for
direct access to generation for all power purchasers outside  the
power  exchange  under certain circumstances. The  bill  provides
that existing qualifying facility power sales agreements will  be
honored. Other states have or are expected to take similar  steps
aimed  at  increasing competition by restructuring  the  electric
industry,  allowing  retail  competition  and  deregulating  most
electric rates. In addition, recent federal legislation has  been
proposed which would repeal PURPA and the Public Utility  Holding
Company Act of 1935, as amended, respectively. The Company cannot
predict  the  final  form  or timing  of  the  proposed  industry
restructuring  or  the  impact on its  operations.  However,  the
Company believes that the impending changes in the regulation  of
the  United States power markets will reflect many aspects of the
United   Kingdom   model   (discussed  below)   for   competitive
generation, transmission, distribution and supply of energy.  The
Company  further  expects that the current  effort  to  introduce
broader  wholesale  and retail competition in the  United  States
will  result  in a continuation and acceleration  of  the  recent
trend   toward   consolidation  among  domestic   utilities   and
independent  power producers and an increase in the trend  toward
disaggregation (or unbundling) of vertically integrated utilities
into   separate   generation,   transmission   and   distribution
businesses.

     MidAmerican Energy is subject to comprehensive regulation by
several   utility   regulatory   agencies   which   significantly
influences  the  operating environment and the recoverability  of
costs from utility customers. That regulatory environment has  to
date, in general, given MidAmerican Energy an exclusive right  to
serve electricity customers within its service territory and,  in
turn,  the  obligation  to  provide  electric  service  to  those
customers.

      In Illinois, the electric retail business is opening up  to
competition  and will be phased in between October 1999  and  May
2002.

     In   Iowa,   if   MidAmerican   Energy's   annual   electric
jurisdictional return on common equity exceeds 12%, then an equal
sharing between customers and shareholders of earnings above  the
12%  level  begins;  if  it  exceeds  14%,  then  two-thirds   of
MidAmerican's  share  of  those  earnings  will   be   used   for
accelerated  recovery of certain regulatory assets.   MidAmerican
Energy is precluded from filing for increased rates prior to 2001
unless  the return on common equity falls below 9%. Other parties
signing  the  agreement are prohibited from  filing  for  reduced
rates  prior  to 2001 unless the return on common  equity,  after
reflecting credits to customers, exceeds 14%.

     Prior to July 11, 1997, MidAmerican Energy recouped its fuel
costs  for  electricity generation from its Iowa customers  on  a
current  basis  through  the Iowa energy adjustment  clause,  and
thus,  fuel  costs had little impact on net income.  Since  then,
base rates for Iowa customers include a factor for recovery of  a
representative level of fuel costs. However, to the extent actual
fuel costs vary from that factor within a defined range, earnings
are impacted.

      MidAmerican Energy provides gas service at retail  pursuant
to  non-exclusive  municipal franchises.   The  cost  of  gas  is
recovered  from  customers  through a Purchased  Fuel  Adjustment
Clause.
<PAGE>
     In connection with the recent approval by the Iowa Utilities
Board of the MidAmerican Merger, MidAmerican Energy agreed, among
other  things,  to  use  all commercially reasonable  efforts  to
maintain an investment grade credit rating for MidAmerican Energy
and  its  long-term  debt and to seek the approval  of  the  Iowa
Utilities  Board  of  a reasonable utility capital  structure  if
MidAmerican   Energy's  common  equity  level   decreases   below
specified   levels   (42%   and  39%,  respectively,   of   total
capitalization) under certain circumstances.

      Statement of Financial Accounting Standards (SFAS)  No.  71
sets   forth  accounting  principles  for  operations  that   are
regulated  and meet certain criteria.  For operations  that  meet
the criteria, SFAS 71 allows, among other things, the deferral of
costs that would otherwise be expensed when incurred.  A possible
consequence  of  the  changes  in the  utility  industry  is  the
discontinued   applicability  of  SFAS  71.   The   majority   of
MidAmerican   Energy's  electric  and  gas   utility   operations
currently meet the criteria of SFAS 71, but its applicability  is
periodically  reexamined.  If utility operations no  longer  meet
the criteria of SFAS 71, MidAmerican Energy would be required  to
write off the related regulatory assets and liabilities from  its
balance sheet and thus, a material adjustment to earnings in that
period could result.

     The United Kingdom
                                
      The electricity industry in the United Kingdom has seen the
privatization  of electric supply and distribution,  and  gradual
phase-in  of  competition in supply, since 1990. The  Electricity
Act of 1989 established an industry structure that permitted this
phased-in  competition to occur. Since that time, in England  and
Wales,  electricity  is produced by generators,  the  largest  of
which   are   National  Power,  PowerGen  and   British   Energy.
Electricity is transmitted through the national grid transmission
system  by  The National Grid Company plc ("NGC") and distributed
to  customers by the twelve regional electric companies  ("RECs")
in  their  respective authorized areas. Most customers  currently
are  supplied with electricity by their local REC, although there
are   other   suppliers  holding  second  tier  supply  licenses,
including  other generators and RECs, who can compete  to  supply
customers  in  that  REC's authorized area.   During  the  fourth
quarter of 1998, the market for supplying electricity began to be
opened  to  competition,  and  all  customers  are  expected   to
eventually  be  free to choose their electricity supplier.   This
phased-in  program, which is proceeding by geographic  areas,  is
expected to be completed by the summer of 1999.

      Virtually all electricity generated in England and Wales is
sold  by  generators  and bought by suppliers  through  the  Pool
described  below. A generator that is a Pool member  and  also  a
licensed  supplier must nevertheless sell all the electricity  it
generates into the Pool, and purchase all the electricity that it
supplies from the Pool. Because Pool prices fluctuate, generators
and  suppliers  may  enter into bilateral arrangements,  such  as
contracts  for  differences ("CFDs"),  to  provide  a  degree  of
protection against such fluctuations.

      Distribution. Each of the RECs is required to  offer  terms
for  connection to its distribution system to any person, and for
use  of  its  distribution system to any  authorized  electricity
operator,  in  each  case  located  in  its  franchise  area.  In
providing  use  of  its  distribution  system,  a  REC  must  not
discriminate  between its own supply business  and  that  of  any
other  authorized electricity operator, or between those of other
authorized  electricity  operators; nor may  its  charges  differ
except where justified by differences in cost.

     Most revenue of the distribution business is controlled by a
distribution  price  control  formula.  The  Retail  Price  Index
("RPI") used in this formula reflects the average of the 12 month
inflation rates recorded for each month in the previous  July  to
December  period.  The  distribution price control  formula  also
reflects  an  XD  factor which was established by  the  Regulator
following  review  and  is set at 3% from  April  1,  1997.  This
formula  determines  the  maximum  average  price  per  unit   of
electricity distributed (in pence per kilowatt hour) which a  REC
is  entitled  to  charge. The distribution price control  formula
permits  RECs  to  receive additional revenues due  to  increased
distribution  of units and a predetermined increase  in  customer
numbers. The price control does not seek to constrain the profits
of  a  REC  from  year to year. It is a control on  income  which
operates independently of the REC's costs. During the lifetime of
the  price  control additional cost savings therefore  contribute
<PAGE>
directly  to profit. The distribution prices allowable under  the
current  distribution price control formula are  expected  to  be
reviewed  by  the  Regulator at the expiration of  the  formula's
scheduled five-year duration, effective as of April 1, 2000.  The
formula  may be further reviewed at other times in the discretion
of the Regulator.

      With  effect  from  April  1, 1998,  domestic  and  smaller
commercial customers' prices became subject to a price cap  which
required  reductions  of 4.2% (less inflation)  compared  to  the
prices prevailing at August 1, 1997.  A further reduction  of  3%
(less inflation) will be required on April 1, 1999.

       Supply.  Subject  to  minor  exceptions,  all  electricity
customers  in the United Kingdom must be supplied by  a  licensed
supplier. Licensed suppliers purchase electricity and make use of
the transmission and distribution networks to achieve delivery to
customers' premises.

      There  are two types of licensed suppliers: PES (or  "first
tier")  suppliers and second tier suppliers. PESs are  the  RECs,
Scottish  Power  and  Hydro-Electric,  each  supplying   in   its
respective   authorized  area.  Second  tier  suppliers   include
National   Power,  PowerGen,  British  Energy,  Scottish   Power,
Hydro-Electric and other PESs supplying outside their  respective
authorized  areas. There are also a number of independent  second
tier suppliers.

       The  Pool.  The  Pool  was  established  at  the  time  of
privatization  for  bulk trading of electricity  in  England  and
Wales  between  generators and suppliers. The Pool  reflects  two
principal  characteristics of the physical generation and  supply
of  electricity  from  a  particular generator  to  a  particular
supplier. First, it is not possible to trace electricity  from  a
particular generator to a particular supplier. Second, it is  not
practicable  to  store  electricity  in  significant  quantities,
creating  the need for a constant matching of supply and  demand.
Subject  to  certain  exceptions, all  electricity  generated  in
England  and Wales must be sold and purchased through  the  Pool.
All  licensed  generators and suppliers must  become  and  remain
signatories  to  the  Pooling  and  Settlement  Agreement,  which
governs  the  constitution and operation  of  the  Pool  and  the
calculation of payments due to and from generators and suppliers.
The  Pool  also provides centralized settlement of  accounts  and
clearing. The Pool does not itself buy or sell electricity.

      Prices  for electricity are set by the Pool daily for  each
one-half  hour  of the following day based on  the  bids  of  the
generators and a complex set of calculations matching supply  and
demand and taking account of system stability, security and other
costs.  A  settlement system is used to calculate prices  and  to
process metered, operational and other data and to carry out  the
other  procedures necessary to calculate the payments  due  under
the   Pool   trading  arrangements.  The  settlement  system   is
administered  on  a  day-to-day basis by Energy  Settlements  and
Information Services, Limited, a subsidiary of NGC, as settlement
system administrator.

      The  price  control regulations which govern the authorized
area  supply  market  permit  the pass-through  to  customers  of
certain  permitted costs, which include the cost of  arrangements
such  as  CFDs to hedge against Pool price volatility. Generally,
CFDs are contracts between generators and suppliers that have the
effect  of  fixing  the  price of electricity  for  a  contracted
quantity  of electricity over a specific time period. Differences
between  the  actual price set by the Pool and the agreed  prices
give  rise  to  difference payments between the  parties  to  the
particular  CFD. At any time, Northern's forecast  supply  market
demand   is  substantially  hedged  through  various   types   of
agreements including CFDs.

      Northern's supply business generally involves entering into
fixed  price  contracts to supply electricity to  its  customers.
Northern obtains the electricity to satisfy its obligations under
such contracts primarily by purchases from the Pool.  Because the
price of electricity purchased from the Pool, Northern is exposed
to risk arising from differences between the fixed price at which
it  sells  and  the  fluctuating prices  at  which  it  purchases
electricity,  unless it can effectively hedge such exposure.   In
addition,  the United Kingdom government has announced  plans  to
reform   the   wholesale  trading  market  for   electricity   by
eliminating  the Pool and creating a bilateral wholesale  trading
market.  The announced date for elimination of the Pool is April,
2000.   Elimination of the Pool will create risks of  a  mismatch
between  the prices at which Northern purchases electricity  from
wholesale  suppliers  and the price at which  it  has,  or  will,
<PAGE>
contract  to  sell  electricity  to  its  customers.   Northern's
ability to manage such risks at acceptable levels will depend, in
part,  on  the  specifics of the supply contracts  that  Northern
enters  into,  Northern's  ability to  implement  and  manage  an
appropriate contracting and hedging strategy, and the development
of an adequate market for hedging instruments.


         The Company's Distribution and Supply Business
                                
MidAmerican Energy Company
                                
       MidAmerican   Energy   is  the  largest   energy   company
headquartered in Iowa, with assets and operating revenues for the
year  ended  December  31, 1998 totaling $3.6  billion  and  $1.7
billion,  respectively.  Its strategy is to  become  the  leading
regional   provider   of   energy  and  complementary   services.
MidAmerican  is primarily engaged in the business of  generating,
transmitting,  distributing and selling electric  energy  and  in
distributing, selling and transporting natural gas.   MidAmerican
distributes  electric  energy at retail in  Council  Bluffs,  Des
Moines, Fort Dodge, Iowa City, Sioux City and Waterloo, Iowa, the
Quad  Cities  (Davenport and Bettendorf, Iowa  and  Rock  Island,
Moline  and  East  Moline, Illinois) and  a  number  of  adjacent
communities and areas.  It also distributes natural gas at retail
in  Cedar  Rapids, Des Moines, Fort Dodge, Iowa City, Sioux  City
and  Waterloo, Iowa; the Quad Cities; Sioux Falls, South  Dakota;
and  a  number of adjacent communities and areas.  As of December
31,  1998, MidAmerican had 652,900 retail electric customers  and
621,500 retail natural gas customers.

      In  addition  to retail sales, MidAmerican Energy  delivers
electricity to other utilities and municipalities who  distribute
it to end-use customers (sales for resale) and MidAmerican Energy
transports  natural  gas,  for a fee,  through  its  distribution
system for certain large customers who have independently secured
their own supply of natural gas.

       MidAmerican  Energy's  electric  and  gas  operations  are
conducted  under franchises, certificates, permits  and  licenses
obtained  from state and local authorities. The franchises,  with
various expiration dates, are typically for 25-year terms.

       MidAmerican   Energy  has  a  residential,   agricultural,
commercial and diversified industrial customer group, in which no
single industry or customer accounted for more than 3% (food  and
kindred  products industry) of its total 1998 electric  operating
revenues or 3% (food and kindred products industry) of its  total
1998 gas operating margin. Among the primary industries served by
MidAmerican  Energy  are  those  which  are  concerned  with  the
manufacturing, processing and fabrication of primary metals, real
estate,  food products, farm and other non-electrical  machinery,
and cement and gypsum products.

      During  1998, MidAmerican Energy increased its emphasis  on
wholesale  gas trading and marketing activity, some of which  was
previously   managed   by   one  of  MidAmerican's   nonregulated
subsidiaries.

      For  the year ended December 31, 1998, MidAmerican  derived
approximately  69%  of  its  gross operating  revenues  from  its
regulated  electric  business, and 25%  from  its  regulated  gas
business  and 6% from its nonregulated business activities.   For
1997  and  1996, the corresponding percentages were 65%  electric
and 31% gas and 4% nonregulated; and 66% electric and 32% gas and
2% nonregulated, respectively.

     The electric utility industry is in the midst of significant
regulatory  change.   Traditionally, prices charged  by  electric
utility  companies  have  been regulated  by  federal  and  state
commissions  and have been based on cost of service.   In  recent
years,  changes  have occurred, and are expected to  continue  to
occur,  that  move the electric utility industry  toward  a  more
competitive,  market-based  pricing environment.   These  changes
will have a significant impact on the way MidAmerican Energy does
business.

      A  substantial  majority  of MidAmerican's  business  still
operates  in a rate-regulated environment and, accordingly,  many
decisions for obtaining and using resources are evaluated from an
electric   and  gas  regulated  business  perspective.   However,
beginning  January 1, 1998, MidAmerican Energy also  manages  its
<PAGE>
operations   as   four  distinct  business  units:    generation,
transmission,  energy distribution and retail.  With  these  four
business  units,  MidAmerican Energy is  able  to  focus  on  the
specific  needs  and anticipated risks and opportunities  of  its
major  businesses.  Certain administrative functions are  handled
by  a corporate services group which supports all of the business
units.

      Although  specific  functions  may  be  changed  as  future
circumstances warrant, the focus of each business unit  has  been
established.  Presently, significant functions of the  generation
business unit include the production of electricity, the purchase
of  electricity  and  natural gas,  and  the  sale  of  wholesale
electricity  and  natural  gas.  The transmission  business  unit
coordinates  all  activities  related  to  MidAmerican   Energy's
electric transmission facilities, including monitoring access  to
and  assuring  the reliability of the transmission  system.   The
energy  distribution  business unit distributes  electricity  and
natural gas to end-users and conducts related activities.  Retail
includes  marketing, customer service and related  functions  for
core and complementary products and services.

  Total Electric Sales of MidAmerican Energy By Customer Class
                                

                      1998  1997   1996
   
Residential           22.2%  20.9%  21.1%
Small General Service 17.5   16.5   16.2
Large General Service 28.1   27.4   27.6
Other                  4.4    4.4    4.5
Sales for Resale      27.8   30.8   30.6
                      _____ _____  _____
 Total               100.0% 100.0% 100.0%


      Retail Electric Sales of MidAmerican Energy By State
                                

                          1998  1997   1996

Iowa                      88.4% 88.6%  88.7%
Illinois                  10.9  10.7   10.6
South Dakota               0.7   0.7    0.7
                          ____  _____  _____
 Total                   100.0%100.0%  100.0%



      In  an Iowa pricing settlement approved in 1997 by the Iowa
Utilities  Board,  MidAmerican Energy  was  given  permission  to
negotiate individual contracts with its industrial and commercial
electric customers. The negotiated contracts have differing terms
and  conditions as well as prices. The contracts range in  length
from  five  to  ten years, and some have price renegotiation  and
early termination provisions exercisable by either party. A  vast
majority  of the contracts are for terms of seven years or  less,
although  some large customers have agreed to 10-year  contracts.
Prices are set as fixed prices; however, many contracts allow for
potential price adjustments with respect to environmental  costs,
government  imposed  public purpose programs,  tax  changes,  and
transition costs. While the contract prices are fixed (except for
the  potential adjustment elements), the costs MidAmerican Energy
<PAGE>
incurs  to fulfill these contracts will vary. MidAmerican  Energy
presently  intends to manage this risk through hedging and  other
similar  arrangements. On an aggregate basis, the annual revenues
under these contracts are approximately $155 million.

      In  addition, MidAmerican Energy is precluded by  the  1997
settlement  agreement  from filing for an increase  in  its  Iowa
electric rates prior to 2001, unless its annual return on  common
equity  falls  below  9%.  Likewise, the  other  parties  to  the
agreement,  including  the Office of the Consumer  Advocate,  are
prohibited  from  seeking  a reduction  in  MidAmerican  Energy's
electric rates prior to 2001, unless the return on common equity,
adjusted for the equal sharing between shareholders and customers
of earnings above a 12% return on common equity, exceeds 14%.

       In   Illinois  beginning  October  1,  1999,  larger  non-
residential  customers  and 33% of the remaining  non-residential
customers  will be allowed to select their provider  of  electric
supply  services.  All other non-residential customers will  have
supplier   choice   starting  December  31,  2000.    Residential
customers  all  receive the opportunity to select their  electric
supplier on May 1, 2002.

      Historical  gas sales, excluding transportation throughput,
by customer class as a percent of total gas sales and by state as
a percent of total retail gas sales are shown below:


     Total Gas Sales of MidAmerican Energy By Customer Class
                                

                           1998   1997  1996

Residential                59.9%  60.8%  61.1%
Small General Service      32.1   33.1   33.3
Large General Service       3.7    4.2    4.6
Sales for Resale and Other  4.3    1.9    1.0
                          ______ ______ ______
Total                     100.0% 100.0% 100.0%

         Retail Gas Sales of MidAmerican Energy By State
                                
                              1998   1997   1996

Iowa                          79.0%  79.1%  78.0%
Illinois                      10.2   10.4   11.0
South Dakota                  10.1    9.8   10.3
Nebraska                       0.7    0.7    0.7
                             ______ ______ ______
Total                        100.0% 100.0% 100.0%


      There  are  seasonal  variations  in  MidAmerican  Energy's
electric and gas businesses which are principally related to  the
use  of energy for air conditioning and heating. In 1998, 40%  of
MidAmerican  Energy's  electric revenues  were  reported  in  the
months of June, July, August and September, reflecting the use of
electricity  for  cooling,  and 54% of MidAmerican  Energy's  gas
revenues were reported in the months of January, February,  March
and December, reflecting the use of gas for heating.

      The  annual  hourly  peak  demand on  MidAmerican  Energy's
electric   system  occurs  principally  as  a   result   of   air
conditioning  use  during  the  cooling  season.  In  July  1998,
<PAGE>
MidAmerican  Energy recorded an hourly peak demand of  3,643  MW,
which  is  90  MW more than MidAmerican Energy's previous  record
hourly peak of 3,553 MW set in 1995.

     MidAmerican Energy's accredited net generating capability in
the  summer  of  1998  was  4,425 MW. Accredited  net  generating
capability represents the amount of generation available to  meet
the  requirements on MidAmerican Energy's energy system,  net  of
the  effect of participation purchases and sales and consists  of
Company-owned  generation and power purchased under  a  long-term
power  purchase  contract. The net generating capability  at  any
time   may   be   less  due  to  regulatory  restrictions,   fuel
restrictions  and  generating  units  being  temporarily  out  of
service for inspection, maintenance, refueling or modifications.

      MidAmerican Energy is interconnected with certain Iowa  and
neighboring  utilities  and  is involved  in  an  electric  power
pooling  agreement known as MAPP. MAPP is a voluntary association
of electric utilities doing business in Iowa, Minnesota, Nebraska
and  North  Dakota  and portions of Illinois, Missouri,  Montana,
South  Dakota  and  Wisconsin  and  the  Canadian  provinces   of
Saskatchewan  and  Manitoba. Its membership also  includes  power
marketers,  regulatory agencies and independent power  producers.
MAPP facilitates operation of the transmission system, serves  as
a  power and energy market clearing house and is responsible  for
the safety and reliability of the bulk electric system.

      Each MAPP participant is required to maintain for emergency
purposes  a  net generating capability reserve of  at  least  15%
above  its  system  peak  demand. If a  participant's  capability
reserve falls below the 15% minimum, significant penalties  could
be  contractually  imposed by MAPP. MidAmerican Energy's  reserve
margin for 1998 was approximately 20%.

      In  an effort that began in 1996, MidAmerican is continuing
to  redeploy investments and to invest in other lines of business
that  support  its  strategy.  For  example,  MidAmerican  Realty
Services,  with over 4,500 independent sales representatives  and
approximately  1,150  employees, offers  integrated  real  estate
services   in  seven  states  including  residential   brokerage,
relocation,   title,  abstract  and  mortgage  services.   On   a
consolidated basis, the real estate brokerage operations are  the
second  largest  in  the nation, and the Company  believes  these
operations will provide a strategically important customer access
point and an advertising and "branding" vehicle as energy markets
deregulate,  in  addition  to being profitable  businesses  on  a
stand-alone basis.


Northern Electric

        Northern   Electric   Distribution   Limited   ("Northern
Distribution"),  a  subsidiary of Northern, receives  electricity
from  the  national  grid  transmission  system  and  distributes
electricity  to  each  of its franchise area customer's  premises
using  Northern's network of transformers, switchgear and cables.
Substantially all of the customers in Northern's authorized  area
are  connected to Northern's network and electricity can only  be
delivered  to  them  through  the Northern  distribution  system,
regardless  of whether the electricity is supplied by  Northern's
supply  business  or by other suppliers, thus providing  Northern
with  distribution  volume  that is stable  from  year  to  year.
Northern  Distribution serves approximately 1.5 million customers
in  Northern's area and charges its customers access fees for the
use of the distribution system.

      At  December  31, 1998, Northern's electricity distribution
network  (excluding  service connections to  consumers)  included
approximately   17,000   kilometers   of   overhead   lines   and
approximately   26,000   kilometers   of   underground    cables.
Substantially all substations are owned in freehold, and most  of
the  balance are held on leases which will not expire  within  10
years.  In addition to the circuits referred to above, Northern's
distribution   facilities  also  include   approximately   24,000
transformers and approximately 24,000 substations.

     Northern Electric Supply Limited ("Northern Supply") focuses
on  Northern's supply business and is responsible for  marketing,
tariff setting, contracts and customer service in connection with
the  supply  of  both  electricity  and  gas.  Northern's  supply
business  involves  the  bulk purchase of electricity,  primarily
from the Pool, and subsequent sale to individual customers.
<PAGE>
      Under the terms of its public electricity supply ("PES") or
"first  tier"  license, Northern currently  holds  the  right  to
supply   approximately  1.5  million  supply   customers   within
Northern's  authorized area. In addition to competing for  supply
customers  in its authorized area, Northern holds a  second  tier
license  to compete with the RECs and other suppliers to  provide
electricity  to  supply customers outside  its  authorized  area.
Northern  is one of the largest suppliers in the competitive  and
open  electricity  market  in  the United  Kingdom  and  supplies
customers  in  all  15  PES areas in Great Britain  and  Northern
Ireland.

      Northern  Supply  also competes to supply  gas  inside  and
outside  its authorized area.  Over the last six months of  1998,
Northern  expanded its supply customer base by 20% by  attracting
nearly  300,000 new gas customers in part through the  Dual  Fuel
marketing program.

     Northern Utility Services Limited ("Northern Utility") is an
engineering company whose role is to adapt, maintain and  restore
the distribution network of Northern and to sell related services
to  third  parties.  Northern  Utility  has  been  able  to  make
significant cost reductions for Northern during the past year  by
working with suppliers in order to improve core processes,  close
selected depot locations, increase staff productivity and  reduce
material   and  plant  costs.  Northern  Utility  has   pioneered
techniques  using innovative diagnostic testing  equipment  which
reduces  the  need for intrusive maintenance. The  equipment  can
identify some of the causes of potential systems failures  before
breakdown  and  subsequent  loss  of  supply  occurs.  Also,  the
continued  development  in the use of trenchless  technology  has
brought both financial and environmental benefits to Northern and
its  customers.  While  Northern Utility's  largest  customer  is
Northern   Distribution,  it  currently  sells  an   average   of
approximately  14%  of  its services to third  parties.  Northern
Utility is Northern's largest employer.

      Northern  Electric  Retail Limited ("Northern  Retail"),  a
subsidiary  of Northern, sells electrical and gas appliances  and
provides  account collection and customer services for Northern's
other businesses.

      Northern Metering Services Limited ("Northern Metering"), a
subsidiary  of  Northern,  provides meter  supply,  installation,
refurbishment  and  certification  services  as  well  as   meter
operator  and  data  collection services. Northern  Metering  has
developed  an  energy  profiling system  which  helps  businesses
reduce  costs  through the more efficient use of all  fuels,  not
just electricity.


                                
        The Company's Power Generation Project Portfolio
                                
      Following the MidAmerican Merger in March 1999, the Company
has   ownership  interests  in  generating  facilities  with   an
aggregate   of  (i)  9,517  net  MW  in  projects  in   operation
representing an aggregate net capacity owned of 5,197 net  MW  of
electric  generating capacity, (ii) 209 net MW in three  projects
under construction representing an aggregate net capacity of  135
net  MW of electric generating capacity and (iii) 594 net  MW  in
three  projects in advanced development stages with signed  power
sales  agreements  or under award representing an  aggregate  net
capacity owned of 569 net MW of electric generating capacity.

      The following tables set out certain information concerning
various Company projects in operation, under construction and  in
development pursuant to signed power sales agreements or  awarded
mandates.
<PAGE>
<TABLE>
<CAPTION>
Project1,2     Facility  Net MW  Fuel  Location  Commercial  U.S. $     Power   Political
               Net  MW   Owned3                   Operation Payments  Purchaser4   Risk
<S>            <C>       <C>    <C>    <C>        <C>           <C>        <C>       <C>                         Insurance
Projects in                                               
Operation
Council Bluffs
 Energy Center
 units 1 & 2      131       131    Coal   Iowa    1954,1958     Yes        MEC       No
Council Bluffs
 Energy Center
 units 3          675       534    Coal   Iowa       1978       Yes        MEC       No
Louisa Generation
 Station          700       616    Coal   Iowa       1983       Yes        MEC       No
Neal Generation
 Station units
 1 & 2            435       435    Coal   Iowa    1964,1972     Yes        MEC       No
Neal Generation
 Station unit 3   515       371    Coal   Iowa       1975       Yes        MEC       No
Neal Generation
 Station unit 4   624       253    Coal   Iowa       1979       Yes        MEC       No
Ottumwa Generation
 Station          716       372    Coal   Iowa       1981       Yes        MEC       No
Quad-Cities    
 Power Station  1,529       383 Nuclear  Illinois    1972       Yes        MEC       No
Riverside
 Generation
 Station          135       135    Coal   Iowa    1925-61       Yes        MEC       No
Combustion
 Turbins          758       758     Gas   Iowa    1969-95       Yes        MEC       No
Moline Water
 Power              3         3   Hydro  Illinois    1970       Yes        MEC       No
Imperial Valley   268       134     Geo  Calif.   1986-96       Yes        Edison    No
Saranac           240        90     Gas  N.Y.        1994       Yes        NYSEG     No
Power Resources   200       100     Gas  Texas       1988       Yes        TUEC      No
NorCon             80        32     Gas  Penn.       1992       Yes        NIMO      No
Yuma               50        25     Gas  Arizona     1994       Yes        SDG&E     No
Roosevelt Hot
Springs            23        17     Geo  Utah        1984       Yes        UP&L      No
Desert Peak        10        10     Geo  Nevada      1985       Yes        N/A       No
Mahanagdong       165       149     Geo  Philippine  1997       Yes        PNOC-EDC  Yes
                                                                           EDC GOP
Malitbog          216       216     Geo  Philippine 1996-97     Yes        PNOC-EDC  Yes
                                                                           GOP
Upper Mahiao      119       119     Geo  Philippine  1996       Yes        PNOC-EDC  Yes
                                                                           GOP
Teesside
 Power Ltd.     1,875       289     Gas  England     1993        No        Various   No
Viking             50        25     Gas  England     1998        No        Northern  No
Total Projects
 in Operation   9,517     5,197                                         
                                                                  
Projects Under                                               
Construction
                                                                  
Casecnan          150       105   Hydro  Philippine  2000      Yes         NIA (GOP) Yes
Salton Sea V       49        25     Geo  Calif.      2000      Yes         Zinc/TBD  No
CE Turbo           10         5     Geo  Calif.      2000      Yes         Zinc/TBD  No
                                                                  
Total Projects                                                             
Under
Construction      209       135
                                                                  
Development                                                       
Projects 5
                                                                  
Telephone Flat     44        44     Geo  Calif.      2001     Yes          BPA      No
Cordova Merchant
 Plant            500       500     Gas  Illinois    2001     Yes          TBD      No
Exeter Power Ltd.  50        25     Gas  England     2000      No          Northern No
                                                                  
Total Development
 Projects         594       569
                                                                  
Total Power                                                       
Generation
 Projects      10,320     5,901
</TABLE>
1  The Company operates all such projects other than Teesside Power Limited, 
Quad Cities Power Station, Ottumwa Generation Station and Desert Peak.

2  The above table excludes three projects in Indonesia, two of which are 
currently in arbitration.  One unit became operational in March 1998.

3  Actual MW may vary depending on operating and reservoir conditions and 
plant design.  Facility Net Capacity (in MW) represents facility gross
capacity (in MW) less parasitic load.  Parasitic load is electrical output
used by the facility and not made available for sale to utilities or other
outside purchasers.  Net MW owned indicates current legal ownership, but, in 
some cases, does not reflect the current allocation of partnership 
distributions.

4  PNOC-Energy Development Corporation ("PNOC-EDC"); Government of the 
Philippines ("GOP") and Philippine National Irrigation Administration ("NIA")
(NIA also purchases water from this facility), Northern Electric plc 
("Northern").  The Government of the Philippines undertaking supports PNOC-EDC's
and NIA's respective obligations.  Southern California Edison Company 
("Edison"); San Diego Gas & Electric Company ("SDG&E"); Utah Power & Light
Company ("UP&L"); Bonneville Power Administration ("BPA"); New York State
Electric & Gas Corporation ("NYSEG"); Texas Utilities Electric Company ("TUEC");
Niagara Mohawk Power Corporation ("NIMO"); and MidAmerican Energy Company 
("MEC").

5  Significant contingencies exist in respect of awards, including without 
limitation, the need to obtain financing, permits and licenses, and the 
completion of construction.  The company is also pursuing a number of other 
power projects which are in the preliminary stage of development.

<PAGE>                                
                      PROJECTS IN OPERATION

United States Power Generation

     MidAmerican Energy Generation Facilities

      All  of  the  coal-fired generating  stations  operated  by
MidAmerican  Energy  are fueled primarily by low-sulfur,  western
coal  from the Powder River Basin.  The use of low-sulfur western
coal  enables  MidAmerican Energy to comply with  the  acid  rain
provisions  of  the  CAAA without having  to  install  additional
costly  emissions  control equipment at its generating  stations.
MidAmerican  Energy's  coal  supply portfolio  includes  multiple
suppliers and mines under agreements of varying term and quantity
flexibility.   During  1998  approximately  65%  of   MidAmerican
Energy's  coal  purchases  were made  under  spot  coal  purchase
agreements.   MidAmerican Energy regularly monitors  the  western
coal market, looking for opportunities to improve its coal supply
portfolio.   MidAmerican  Energy believes  its  sources  of  coal
supply are and will continue to be satisfactory.

      MidAmerican  Energy  uses both the Union  Pacific  Railroad
("UP")  and the Burlington Northern and Santa Fe Railway ("BNSF")
as  originating carriers of its coal supply in order  to  achieve
transportation   diversity  and  competitive  rates.    Coal   is
delivered directly to MidAmerican Energy's Neal Energy Center and
Council  Bluffs Energy Center ("CBEC") by the UP  and  the  BNSF,
respectively.  Coal for MidAmerican Energy's Louisa and Riverside
Energy  Centers is delivered to an interchange point by the  BNSF
for  transportation  to its destination by  the  I&M  Rail  Link.
Competitive  rail  access  is  available  to  CBEC  and  to   the
interchange  point for deliveries to Louisa and Riverside  Energy
Centers.   MidAmerican  Energy believes its  coal  transportation
arrangements are adequate to meet its coal delivery needs.

     MidAmerican Energy uses natural gas and oil as fuel for peak
demand  electric  generation, transmission  support  and  standby
purposes.   These  sources are presently in adequate  supply  and
available to meet MidAmerican Energy's needs.

      While  coal  deliveries to certain of MidAmerican  Energy's
generating   stations  were  adversely  affected  by   the   UP's
nationwide   operational  problems  in  1997  and   early   1998,
MidAmerican Energy believes its coal inventories are adequate  to
meet its needs at expected generation levels.

      MidAmerican  Energy  is a 25% joint owner  of  Quad  Cities
Station.  MidAmerican Energy has been advised by ComEd, the joint
owner  and operator of Quad Cities Station, that the majority  of
its  uranium concentrate and uranium conversion requirements  for
Quad  Cities Station for 1999 can be met under existing  supplies
or  commitments.   ComEd  foresees no problem  in  obtaining  the
remaining  requirements  now  or obtaining  future  requirements.
ComEd further advises that all enrichment requirements have  been
contracted  through 2004.  Commitments for fuel fabrication  have
been  obtained at least through 2001.  ComEd does not  anticipate
that   it   will  have  difficulty  in  contracting  for  uranium
concentrates for conversion, enrichment or fabrication of nuclear
fuel needed to operate Quad Cities Station.

     CE Generation Geothermal Facilities

      CE Generation affiliates currently operate eight geothermal
plants in the Imperial Valley in California (the "Imperial Valley
Project").   Four  of these Imperial Valley Project  plants  (the
"Partnership Projects") were developed by Magma which  originally
owned  a  50% interest.  On April 17, 1996, the Company completed
the  Partnership  Interest  Acquisition  pursuant  to  which  the
Company  acquired  the remaining 50% interests  in  each  of  the
Partnership  Projects for $70 million.  The Partnership  Projects
consist  of  the  Vulcan, Hoch (Del Ranch), Elmore  and  Leathers
projects  (the "Vulcan Project," the "Hoch (Del Ranch)  Project,"
the "Elmore Project" and the "Leathers Project," respectively).
<PAGE>
      The remaining four operating Imperial Valley Project plants
(the  "Salton Sea Projects") are wholly owned by subsidiaries  of
Magma.   Three of these plants were purchased by Magma  on  March
31,  1993 from Union Oil Company of California.  These geothermal
power plants consist of the Salton Sea I project (the "Salton Sea
I  Project"),  the  Salton Sea II project  (the  "Salton  Sea  II
Project")  and  the Salton Sea III project (the "Salton  Sea  III
Project").   The  fourth plant, the Salton Sea  IV  project  (the
"Salton  Sea  IV  Project"), commenced commercial  operations  in
1996.

      Vulcan.   The  Vulcan Project sells electricity  to  Edison
under  a  30-year  SO4 Agreement that commenced on  February  10,
1986.   The  Vulcan Project has a contract capacity and  contract
nameplate  of  29.5 MW and 34 MW, respectively.   Under  the  SO4
Agreement,  Edison  is  obligated to pay  the  Vulcan  Project  a
capacity payment, a capacity bonus payment and an energy payment.
The price for contract capacity payments is fixed for the life of
such SO4 Agreement.  The as-available capacity price is based  on
a  payment  schedule as approved by the CPUC from time  to  time.
The contract energy payment increased each year for the first ten
years, which period expired on February 9, 1996.  Thereafter, the
energy payments are based on Edison's Avoided Cost of Energy.

      Hoch  (Del  Ranch).   The Hoch (Del  Ranch)  Project  sells
electricity  to  Edison  under  a  30-year  SO4  Agreement   that
commenced on January 2, 1989.  The contract capacity and contract
nameplate  are 34 MW and 38 MW, respectively.  The provisions  of
such  SO4  Agreement  are  substantially  the  same  as  the  SO4
Agreement  with  respect to the Vulcan Project.   The  price  for
contract  capacity  payments is fixed for the  life  of  the  SO4
Agreement.   The fixed price period for energy payments  per  kWh
expired  on  January 1, 1999.  After January 1, 1999, the  energy
payments are based on Edison's Avoided Cost.

      Elmore.   The  Elmore Project sells electricity  to  Edison
under  a 30-year SO4 Agreement that commenced on January 1, 1989.
The contract capacity and contract nameplate are 34 MW and 38 MW,
respectively.    The  provisions  of  such  SO4   Agreement   are
substantially the same as the SO4 Agreement with respect  to  the
Vulcan  Project.   The  price for contract capacity  payments  is
fixed for the life of SO4 Agreement.  The fixed price period  for
energy  payments  per kWh expires on December  31,  1998.   After
December  31,  1998, the energy payments are  based  on  Edison's
Avoided Cost of Energy.

      Leathers.  The Leathers Project sells electricity to Edison
pursuant to a 30-year SO4 Agreement that commenced on January  1,
1990.  The contract capacity and contract nameplate are 34 MW and
38  MW,  respectively.  The provisions of such SO4 Agreement  are
substantially the same as the SO4 Agreement with respect  to  the
Vulcan  Project.   The  price for contract capacity  payments  is
fixed for the life of SO4 Agreement which expires on December 31,
1999.   Thereafter, the energy payments will be based on Edison's
Avoided Cost of Energy.

      Salton  Sea  I  Project.  The Salton Sea  I  Project  sells
electricity  to  Edison  pursuant to a 30-year  negotiated  power
purchase  agreement, as amended (the "Salton Sea I  PPA"),  which
provides capacity and energy payments.  The contract capacity and
contract nameplate are each 10 MW.  The capacity payment is based
on  the  firm  capacity price which is currently  $132.58kW-year.
The contract capacity payment adjusts quarterly based on a basket
of  energy  indices for the term of the Salton Sea  I  PPA.   The
energy  payment is calculated using a Base Price (defined as  the
initial value of the energy payment (4.701 cents per kWh for  the
second   quarter  of  1992)),  which  is  subject  to   quarterly
adjustments  based  on  a  basket of indices.   The  time  period
weighted  average energy payment for Salton Sea I was  5.4  cents
per  kWh  during 1998.  As the Salton Sea I PPA  is  not  an  SO4
Agreement, the energy payments do not revert to Edison's  Avoided
Cost of Energy.

      Salton  Sea  II Project.  The Salton Sea II  Project  sells
electricity  to  Edison  pursuant  to  a  30-year  modified   SO4
Agreement that commenced on April 5, 1990.  The contract capacity
and contract nameplate are 15 MW (16.5 MW during on-peak periods)
and  20  MW, respectively.  The contract requires Edison to  make
capacity  payments, capacity bonus payments and energy  payments.
<PAGE>
The  price  for  contract  capacity and contract  capacity  bonus
payments  is  fixed for the life of the modified  SO4  Agreement.
The  energy payments for the first ten-year period, which  period
expires on April 4, 2000, are levelized at a time period weighted
average  of  10.6 cents per kWh.  Thereafter, the monthly  energy
payments  will  be  Edison's Avoided Cost of  Energy.  Edison  is
entitled  to  receive, at no cost, 5% of all energy delivered  in
excess of 80% of contract capacity through September 30, 2004.

      Salton  Sea III Project.  The Salton Sea III Project  sells
electricity  to  Edison  pursuant  to  a  30-year  modified   SO4
Agreement  that  commenced on February 13,  1989.   The  contract
capacity is 47.5 MW and the contract nameplate is 49.8  MW.   The
SO4 Agreement requires Edison to make capacity payments, capacity
bonus  payments  and  energy payments for the  life  of  the  SO4
Agreement.  The price for contract capacity payments is fixed  at
$175/kW  per  year.  The energy payments for the  first  ten-year
period, which period expired on February 12, 1999, were levelized
at  a  time  period  weighted  average  of  9.8  cents  per  kWh.
Thereafter, the monthly energy payments are Edison's Avoided Cost
of Energy.

      Salton  Sea  IV Project.  The Salton Sea IV  Project  sells
electricity to Edison pursuant to a modified SO4 agreement  which
provides  for contract capacity payments on 34 MW of capacity  at
two  different rates based on the respective contract  capacities
deemed attributable to the original Salton Sea PPA option (20 MW)
and  to the original Fish Lake PPA (14 MW).  The capacity payment
price  for  the  20  MW  portion  adjusts  quarterly  based  upon
specified  indices and the capacity payment price for the  14  MW
portion  is  a  fixed  levelized rate.  The energy  payment  (for
deliveries up to a rate of 39.6 MW) is at a fixed price for 55.6%
of the total energy delivered by Salton Sea IV and is based on an
energy  payment schedule for 44.4% of the total energy  delivered
by  Salton Sea IV.  The contract has a 30-year term but Edison is
not  required  to  purchase  the 20 MW  of  capacity  and  energy
originally  attributable to the Salton Sea  I  PPA  option  after
September  30, 2017, the original termination date of the  Salton
Sea I PPA.

     CE Generation Gas Facilities

      Yuma Project.  The Yuma Project is a 50 net MW natural gas-
fired  cogeneration project in Yuma, Arizona providing 50  MW  of
electricity  to San Diego Gas & Electric Company ("SDG&E")  under
an  existing 30-year power purchase contract.  The energy is sold
at  SDG&E's  Avoided Cost of Energy and the capacity is  sold  to
SDG&E  at  a  fixed  price for the life  of  the  power  purchase
contract.  The power is wheeled to SDG&E over transmission  lines
constructed and owned by Arizona Public Service Company  ("APS").
The Yuma Project commenced commercial operation in May 1994.  The
project  entity  has  executed  steam  sales  contracts  with  an
adjacent industrial entity to act as its thermal host.  Since the
industrial entity has the right under its agreement to  terminate
the  agreement  upon  one  year's  notice  if  a  change  in  its
technology  eliminates its need for steam, and  in  any  case  to
terminate  the  agreement at any time upon  three  years  notice,
there can be no assurance that the Yuma Project will maintain its
status as a QF.  However, if the industrial entity terminates the
agreement, the Company anticipates that it will be able to locate
an alternative thermal host in order to maintain its status as  a
QF.   A natural gas supply and transportation agreement has  been
executed with Southwest Gas Corporation, terminable under certain
circumstances by the Company and Southwest Gas Corporation.   The
Yuma Project is unleveraged.  The Company and SDG&E are currently
engaged  in discussions regarding a potential contract  amendment
of the Yuma PPA.

      Saranac Project.  Saranac is a 240 net MW natural gas-fired
cogeneration  facility located in Plattsburgh,  New  York,  which
began  commercial  operation in June 1994.  Saranac  has  entered
into  a 15-year power purchase agreement (the "Saranac PPA") with
NYSEG.   Saranac  is  a  QF and has entered  into  15-year  steam
purchase  agreements  (the "Saranac Steam  Purchase  Agreements")
with  Georgia-Pacific  Corporation and  Tenneco  Packaging,  Inc.
Saranac  has a 15-year natural gas supply contract (the  "Saranac
Gas Supply Agreement") with Shell Canada Limited ("Shell Canada")
to  supply 100% of Saranac's fuel requirements.  Shell Canada  is
responsible  for production and delivery of natural  gas  to  the
U.S.-Canadian border; the gas is then transported  by  the  North
Country Gas Pipeline Corporation ("NCGP") the remaining 22  miles
to the plant.  NCGP is a wholly-owned subsidiary of Saranac Power
Partners,  L.P.  (the  "Saranac Partnership"),  which  also  owns
Saranac.  NCGP also transports gas for NYSEG and Georgia-Pacific.
Each  of  the Saranac PPA, the Saranac Steam Purchase  Agreements
and  the  Saranac Gas Supply Agreement contains  rates  that  are
fixed for the respective contract terms.  Revenues escalate at  a
higher  rate  than  fuel  costs.   The  Saranac  Partnership   is
indirectly   owned  by  subsidiaries  of  CE  Generation,   Tomen
Corporation ("Tomen") and General Electric Capital Corporation.
<PAGE>
      On  February 14, 1995, NYSEG filed with the FERC a Petition
for  a Declaratory Order, Complaint, and Request for Modification
of  Rates  in Power Purchase Agreements Imposed Pursuant  to  the
Public  Utility  Regulatory Policies  Act  of  1978  ("Petition")
seeking  FERC (i) to declare that the rates NYSEG pays under  the
Saranac  PPA,  which was approved by the New York Public  Service
Commission  (the  "PSC"), were in excess of the  level  permitted
under  PURPA and (ii) to authorize the PSC to reform the  Saranac
PPA.   On  March 14, 1995, the Saranac Partnership intervened  in
opposition  to  the  Petition asserting,  inter  alia,  that  the
Saranac  PPA fully complied with PURPA, that NYSEG's  action  was
untimely and that the FERC lacked authority to modify the Saranac
PPA.   On  March  15,  1995,  the  Company  intervened  also   in
opposition  to  the Petition and asserted similar arguments.   On
April 12, 1995, the FERC by a unanimous (5-0) decision issued  an
order denying the various forms of relief requested by NYSEG  and
finding  that  the  rates required under  the  Saranac  PPA  were
consistent  with PURPA and the FERC's regulations.   On  May  11,
1995, NYSEG requested rehearing of the order and, by order issued
July 19, 1995, the FERC unanimously (5-0) denied NYSEG's request.
On  June  14, 1995, NYSEG petitioned the United States  Court  of
Appeals  for  the  District of Columbia Circuit  (the  "Court  of
Appeals") for review of FERC's April 12, 1995 order.  FERC  moved
to  dismiss  NYSEG's petition for review on July  28,  1995.   On
October 30, 1996, all parties filed final briefs and the Court of
Appeals  heard oral arguments on December 2, 1996.  On  July  11,
1997,  the Court of Appeals dismissed NYSEG's appeal from  FERC's
denial of the petition on jurisdictional grounds.

      On  August  7, 1997, NYSEG filed a complaint  in  the  U.S.
District Court for the Northern District of New York against  the
FERC,  the  PSC  (and  the  Chairman,  Deputy  Chairman  and  the
Commissioners  of  the  PSC  as  individuals  in  their  official
capacity),   the   Saranac  Partnership   and   Lockport   Energy
Associates,  L.P.  ("Lockport")  concerning  the  power  purchase
agreements  that  NYSEG entered into with  Saranac  Partners  and
Lockport.   NYSEG's  suit  asserts that  the  PSC  and  the  FERC
improperly  implemented PURPA in authorizing  the  pricing  terms
that  NYSEG,  the Saranac Partnership and Lockport agreed  to  in
those  contracts.  The action raises similar legal  arguments  to
those  rejected  by the FERC in its April and July  1995  orders.
NYSEG  in  addition  asks  for  retroactive  reformation  of  the
contracts  as  of the date of commercial operation  and  seeks  a
refund of $281 million from the Saranac Partnership.  Saranac and
other parties have filed motions to dismiss and oral arguments on
those  motions were heard on March 2, 1998 and again on March  3,
1999.  Saranac believes that NYSEG's claims are without merit for
the same reasons described in the FERC's orders.

      Power  Resources Project.  Power Resources is a 200 net  MW
natural  gas-fired cogeneration project located near Big  Spring,
Texas,  which has a 15-year power purchase agreement (the  "Power
Resources  PPA")  with Texas Utilities Electric  Company.   Power
Resources  began  commercial  operation  in  June  1988.    Power
Resources  is a QF and has entered into a 15-year steam  purchase
agreement  (the "Power Resources Steam Purchase Agreement")  with
Fina Oil and Chemical Company ("Fina"), a subsidiary of Petrofina
S.A.  of  Belgium.  Power Resources has entered into an agreement
(the  "FSGC  Gas  Supply  Agreement") with  Falcon  Seaboard  Gas
Company  ("FSGC") for Power Resources' fuel requirements  through
December 2003.  In June 1995, FSGC and Louis Dreyfus Natural  Gas
Corp.  ("Dreyfus")  executed  an eight-year  natural  gas  supply
agreement  (the "FSGC-Dreyfus Gas Supply Agreement"), with  which
FSGC  will fulfill its supply commitment to PRI from October 1995
to  the end of the term of the Power Resources PPA.  Each of  the
Power Resources PPA, the Power Resources Steam Purchase Agreement
and  the FSGC Gas Supply Agreement contains rates that are  fixed
for the respective contract terms.  Revenues escalate at a higher
rate than fuel costs.

      NorCon  Project.  NorCon is an 80 net MW natural  gas-fired
cogeneration  facility located in North East, Pennsylvania  which
began  commercial operation in December 1992.  NorCon has  a  25-
year  power  purchase agreement (the "NorCon PPA")  with  Niagara
Mohawk  Power  Corporation ("NIMO").  NorCon  is  a  QF  and  has
entered  into  a  20-year steam purchase agreement  (the  "NorCon
Thermal  Energy Agreement") with Welch Foods Inc., a  Cooperative
("Welch  Foods").   NorCon  has  a  15-year  natural  gas  supply
contract (the "NorCon Gas Purchase Agreement") with Louis Dreyfus
Gas Marketing Corp. to supply 100% of NorCon's fuel requirements.
A  twenty-year  natural  gas transportation  agreement  has  been
entered into with National Fuel Gas Supply Corporation ("National
<PAGE>
Fuel") to provide transportation to NorCon.  Transportation costs
are  deducted  from  payments made pursuant  to  the  NorCon  Gas
Purchase Agreement.  The NorCon Thermal Energy Agreement contains
rates  that escalate at an inflation-based index, and the  NorCon
Gas  Purchase Agreement's rates are fixed for the contract  term.
NorCon  Power  Partners, L.P. ("the "NorCon Partnership"),  which
owns NorCon, is indirectly owned by subsidiaries of CE Generation
and  Tomen.   The  NorCon project has had a  number  of  on-going
contractual disputes with NIMO which are unresolved.


     Other U.S. Geothermal Interests

     Roosevelt Hot Springs.  A subsidiary of the Company operates
and  owns  an approximately 70% indirect interest in a geothermal
steam  field which supplies geothermal steam to a 23 net MW power
plant owned by Utah Power & Light Company ("UP&L") located on the
Roosevelt  Hot  Springs  property under  a  30-year  steam  sales
contract.   The Company obtained approximately $20.3  million  of
cash  under a pre-sale agreement with UP&L whereby UP&L  paid  in
advance  for the steam produced by the steam field.  The  Company
must  make certain penalty payments to UP&L if the steam produced
does not meet certain quantity and quality requirements.

      Desert Peak.  A subsidiary of the Company is the owner of a
10  net  MW  geothermal plant at Sparks,  Nevada.   In  1998  the
Company  executed an agreement pursuant to which the Desert  Peak
Project is leased to a third party power producer and the Company
receives rental payments.

      Mammoth.  Magma receives royalty revenues from a 10 net  MW
and  a  12 net MW contract nameplate geothermal power plant  (the
"First   Mammoth   Plant"   and  the  "Second   Mammoth   Plant,"
respectively,  and  referred  to  herein,  collectively,  as  the
"Mammoth Plants") at Mammoth Lakes, California.  Electricity from
the  Mammoth  Plants is sold to Edison under two long-term  power
purchase  agreements.   The First Mammoth Plant  and  the  Second
Mammoth  Plant  began  commercial operation  in  1985  and  1991,
respectively.    Magma  leases  both  property   and   geothermal
resources  to  support the Mammoth Plants in return  for  certain
base  royalty and bonus royalty payments.  For the First  Mammoth
Plant and the Second Mammoth Plant, the base royalty is 12.5% and
12%,  respectively,  of gross electricity  sales  revenues.   The
bonus  royalty  for the Mammoth Plants is 50% of  the  excess  of
annual  gross  electricity sales revenues over an annual  revenue
standard based on the Mammoth Plants operating at 85% of contract
capacity.

United Kingdom Power Generation

      In  the  United  Kingdom, a Northern  subsidiary,  Northern
Electric  Generation Limited ("Northern Generation"), focuses  on
electricity  generation,  primarily  through  its  ownership   in
Teesside  (described herein) and its operation and  ownership  of
Viking  (described herein).  Northern Generation  also  owns  and
operates  a  5  MW  diesel  power  generating  plant  located  in
Northallerton, England.

      Teesside.   Teesside  Power Limited ("Teesside")  owns  and
operates an 1,875 net MW combined cycle gas-fired power plant  at
Wilton.  Northern owns a 15.4% interest in Teesside, but does not
operate the plant.  Northern purchases 400 MW of electricity from
Teesside under a long-term power purchase agreement.

      Viking.  Viking Power Limited ("Viking") is a company owned
50%  by  Northern  and  50% by Rolls-Royce Power  Ventures  which
operates a 50 net MW natural gas-fired power plant at Seal  Sands
on Teesside.  The project utilizes an aero-derivative Rolls-Royce
Trent  Engine  and  is  embedded  on  the  Northern  distribution
network.  Viking became operational in October 1998, has a  long-
term  gas  supply and electricity off-take contract with Northern
and is being operated by Northern Generation.

The Philippines Power Generation
<PAGE>
      Upper  Mahiao.   The  Upper Mahiao  facility  has  been  in
commercial  operation since June 17, 1996,  although  output  was
constrained  until  1998  because  the  required  full   capacity
transmission  line  was  not  completed  and  provided   by   the
Philippine  National  Power  Corporation  ("NPC")  to   CE   Cebu
Geothermal   Power  Company,  Inc.  ("CE  Cebu"),  a   Philippine
corporation that is 100% indirectly owned by the Company.  During
the  period  of constrained operation, PNOC-EDC was required  to,
and  paid  all capacity fees under the take or pay provisions  of
the  contract.  In early 1998, the required transmission line was
completed,  allowing unconstrained operation.  As  a  result,  CE
Cebu  has been receiving capacity and energy payments from  PNOC-
EDC since that time.

      A  consortium of international banks are providing the term
loans, supported by political risk insurance from the Ex-Im Bank.
Upon  completion of the transmission line, the construction  loan
was  converted  to  a  term loan in May 1998 provided  by  United
States Export-Import Bank and a local Philippine bank.

      Under the terms of an energy conversion agreement, executed
on  September 6, 1993 (the "Upper Mahiao ECA"), CE Cebu owns  and
operates the Upper Mahiao Project during the ten-year cooperation
period, which commenced in June, 1996 after which ownership  will
be transferred to PNOC-EDC at no cost.

     The Upper Mahiao Project is located on land provided by PNOC-
EDC  at  no  cost.   It takes geothermal steam  and  fluid,  also
provided by PNOC-EDC at no cost, and converts its thermal  energy
into electrical energy sold to PNOC-EDC on a "take-or-pay" basis.
Specifically,  PNOC-EDC  is obligated to  pay  for  100%  of  the
electric  capacity  that  is nominated  each  year  by  CE  Cebu,
irrespective  of whether PNOC-EDC is willing or  able  to  accept
delivery  of such capacity.  PNOC-EDC pays to CE Cebu a fee  (the
"Capacity Fee") based on the plant capacity nominated to PNOC-EDC
in   any  year  (which,  at  the  plant's  design  capacity,   is
approximately  95% of total contract revenues)  and  a  fee  (the
"Energy Fee") based on the electricity actually delivered to PNOC-
EDC  (approximately  5%  of total contract  revenues).   Payments
under  the  Upper Mahiao ECA are denominated in U.S. dollars,  or
computed in U.S. dollars and paid in Philippine pesos at the then-
current  exchange  rate, except for the Energy Fee.   Significant
portions of the Capacity Fee and Energy Fee are indexed  to  U.S.
and Philippine inflation rates, respectively.  PNOC-EDC's payment
requirements,  and its other obligations under the  Upper  Mahiao
ECA, are supported by the Government of the Philippines through a
performance undertaking.

      The  payment of the Capacity Fee is not excused if PNOC-EDC
fails  to  deliver  or remove the steam or  fluids  or  fails  to
provide  the  transmission facilities, even if  its  failure  was
caused  by  a  force majeure event.  In addition,  PNOC-EDC  must
continue  to  make  Capacity Fee payments if  there  is  a  force
majeure event (e.g., war, nationalization, etc.) that affects the
operation  of  the Upper Mahiao Project and that  is  within  the
reasonable  control  of  PNOC-EDC  or  the  Government   of   the
Philippines or any agency or authority thereof.

      PNOC-EDC is obligated to purchase CE Cebu's interest in the
facility  under  certain  circumstances, including  (i)  extended
outages  resulting from the failure of PNOC-EDC  to  provide  the
required  geothermal  fluid,  (ii) certain  material  changes  in
policies or laws which adversely affect CE Cebu's interest in the
project, (iii) transmission failure, (iv) failure of PNOC-EDC  to
make  timely payments of amounts due under the Upper Mahiao  ECA,
(v)  privatization  of PNOC-EDC or NPC, and  (vi)  certain  other
events.   The price will be the net present value (at a  discount
rate  based  on the last published Commercial Interest  Reference
Rate   of   the   Organization  for  Economic   Cooperation   and
Development) of the total remaining amount of Capacity Fees  over
the remaining term of the Upper Mahiao ECA.

      Mahanagdong.   The Mahanagdong Project  is  a  165  net  MW
geothermal  power  project  owned  and  operated  by   CE   Luzon
Geothermal  Power  Company,  Inc.   ("CE  Luzon"),  a  Philippine
corporation of which 100% of the common stock is indirectly owned
by  the  Company.  Another industrial company owns an approximate
10%  preferred  equity interest in the project.  The  Mahanagdong
Project  has  been in commercial operation since July  25,  1997,
although its output was constrained until early 1998 because  the
required  full  transmission line was not  completed  until  that
time.   The Mahanagdong Project sells 100% of its capacity  on  a
similar basis as described above for the Upper Mahiao Project  to
<PAGE>
PNOC-EDC,  which in turn sells the power to NPC for  distribution
to  the  island  of  Luzon.  During  the  period  of  constrained
operation,  PNOC-EDC was required to, and paid all capacity  fees
under the take or pay provisions of the contract.

      The  project financing term loan is being provided by OPIC,
Ex-Im  Bank  and  a  consortium  of  international  banks.   Upon
completion  of the transmission line, the construction  loan  was
converted to a term loan in June, 1998.  Political risk insurance
from Ex-Im Bank has been obtained for the commercial lenders.

      The  terms  of an energy conversion agreement, executed  on
September  18,  1993 (the "Mahanagdong ECA"),  are  substantially
similar  to  those of the Upper Mahiao ECA.  The Mahanagdong  ECA
provides  for a ten-year cooperation period.  At the end  of  the
cooperation period, the facility will be transferred to  PNOC-EDC
at  no cost.  All of PNOC-EDC's obligations under the Mahanagdong
ECA are supported by the Government of the Philippines through  a
performance  undertaking.  The capacity fees are expected  to  be
approximately 97% of total revenues at the design capacity levels
and  the energy fees are expected to be approximately 3% of  such
total revenues.

      Malitbog.   The Malitbog Project is a 216 net MW geothermal
project  owned  and operated by Visayas Geothermal Power  Company
("VGPC"), a Philippine general partnership that is wholly  owned,
indirectly,  by  the Company.  The three Units  of  the  Malitbog
facility were put into commercial operation on July 25, 1996 (for
Unit  I)  and  July 25, 1997 (for Units II and III), although  as
with  the  Upper Mahiao and Mahanagdong projects,  operation  was
constrained  due  to  a lack of the necessary transmission  line.
VGPC  is  selling 100% of its capacity on substantially the  same
basis  as  described above for the Upper Mahiao Project to  PNOC-
EDC,  which  sells  the  power  to  NPC.  During  the  period  of
constrained  operation, PNOC-EDC was required to,  and  paid  all
capacity fees under the take or pay provisions of the contract.

      A  consortium of international banks and OPIC are providing
the  term  loan facilities.  Upon completion of the  transmission
line,  the  construction loan was converted to  a  term  loan  in
April, 1998.

     The Malitbog Project is located on land provided by PNOC-EDC
at  no cost.  The electrical energy produced by the facility will
be  sold to PNOC-EDC on a take-or-pay basis.  Specifically, PNOC-
EDC  is  obligated to make payments (the "Capacity Payments")  to
VGPC  based upon the available capacity of the Malitbog  Project.
The Capacity Payments equal approximately 100% of total revenues.
The  Capacity  Payments will be payable so long as  the  Malitbog
Project is available to produce electricity, even if the Malitbog
Project  is  not operating due to scheduled maintenance,  because
PNOC-EDC  fails  to  supply  steam to  the  Malitbog  Project  as
required  or  because  NPC  is unable (or  unwilling)  to  accept
delivery  of electricity from the Malitbog Project.  In addition,
PNOC-EDC must continue to make the Capacity Payments if there  is
a  force  majeure event (e.g., war, nationalization,  etc.)  that
affects the operation of the Malitbog Project and that is  within
the  reasonable  control of PNOC-EDC or  the  Government  of  the
Philippines  or any agency or authority thereof.   A  substantial
majority of the Capacity Payments are required to be made by PNOC-
EDC in dollars.  The portion of Capacity Payments payable to PNOC-
EDC  in  pesos is expected to vary over the term of the  Malitbog
ECA  from  10%  of  VGPC's revenues in the  early  years  of  the
Cooperation  Period (as defined below) to 23% of VGPC's  revenues
at  the  end of the Cooperation Period.  Payments made  in  pesos
will  generally be made to a peso-dominated account and  will  be
used  to  pay peso-denominated operation and maintenance expenses
with  respect to the Malitbog Project and Philippine  withholding
taxes,  if  any,  on  the Malitbog Project's debt  service.   The
Government  of  the  Philippines has entered into  a  performance
undertaking (the "Performance Undertaking"), which provides  that
all  of PNOC-EDC's obligations pursuant to the Malitbog ECA carry
the full faith and credit of, and are affirmed and guaranteed by,
the Government of the Philippines.

      PNOC-EDC  is obligated to purchase VGPC's interest  in  the
facility  under  certain  circumstances,  including  (i)  certain
material  changes  in  policies or laws  which  adversely  affect
VGPC's  interest in the project, (ii) any event of force  majeure
which  delays performance by more than 90 days and (iii)  certain
other  events.  The price will be the net present  value  of  the
capital  cost  recovery fees that would have  been  due  for  the
remainder  of  the  Cooperation  Period  with  respect  to   such
generating unit(s).

      The  Malitbog ECA cooperation period will expire ten  years
after  the date of commencement of commercial operation  of  Unit
III.  At the end of the cooperation period, the facility will  be
transferred to PNOC-EDC at no cost, on an "as is" basis.  All  of
PNOC-EDC's  obligations under the Malitbog ECA are  supported  by
the   Government  of  the  Philippines  through   a   performance
undertaking.   The capacity fees are 100% of total  revenues  and
there is no energy fee.
<PAGE>
                    Projects in Construction

United States

      Zinc Recovery Project.  The Company developed and owns  the
rights  to  a proprietary process for the extraction of  minerals
from  elements  in  solution in the geothermal brine  and  fluids
utilized  at its Imperial Valley plants as well as the production
of  power  to be used in the extraction process.   A pilot  plant
has   successfully  produced  commercial  quality  zinc  at   the
Company's Imperial Valley Project.

      Minerals  LLC, an indirect wholly-owned subsidiary  of  the
Company,  is  constructing the Zinc Recovery Project  which  will
recover  zinc  from  the  geothermal brine  (the  "Zinc  Recovery
Project").   Four  facilities  will be  installed  near  Imperial
Valley Project sites to extract a zinc chloride solution from the
brine  through and ion exchange process.  This solution  will  be
transported to a central processing plant where zinc ingots  will
be   produced  through  solvent  extraction,  electrowinning  and
casting processes.  The Zinc Recovery Project is designed to have
a  capacity of approximately 30,000 metric tonnes per year and is
scheduled to commence commercial operation in mid-2000.  The zinc
produced  by  the Zinc Recovery Project is expected  to  be  sold
primarily  to U.S. West Coast customers such as steel  companies,
alloyers and galvanizers.

      The  Zinc Recovery Project is being constructed by Kvaerner
U.S.  Inc.  ("Kvaerner") pursuant to a date certain, fixed-price,
turnkey  engineering, procurement and construction contract  (the
"Zinc  Recovery Project EPC Contract").  Kvaerner  is  a  wholly-
owned  indirect  subsidiary of Kvaerner ASA,  an  internationally
recognized engineering and construction firm experienced  in  the
metals, mining and processing industries.

       Salton  Sea  V.   Power  LLC,  an  indirect  wholly  owned
subsidiary  of  CE  Generation, is  construction  Salton  Sea  V.
Salton  Sea  V will be a 49 net MW geothermal power  plant  which
will  sell approximately one-third of its net output to the  Zinc
Recovery  Project.   The  remainder  will  be  sold  through  the
California  Power  Exchange  ("PX").   Salton  Sea  V  is   being
constructed  pursuant  to a date certain,  fixed  price,  turnkey
engineering,  procurement and construction contract (the  "Salton
Sea  V  EPC Contract") by Stone & Webster Engineering Corporation
("SWEC").   SWEC  is one of the world's leading  engineering  and
construction firms for the construction of electric power  plants
and,  in  particular, geothermal power plants.  Salton Sea  V  is
schedule to commence commercial operation in mid-2000.

     CE Turbo.  Turbo LLC, an indirect wholly-owned subsidiary of
CE  Generation,  is constructing the CE Turbo  Project.   The  CE
Turbo  Project will have a capacity of 10 net MW.  The net output
of the CE Turbo Project will be sold to the Zinc Recovery Project
or sold through the PX.  In addition to the CE Turbo Project, the
Partnership   Projects  are  constructing  an  upgrade   to   the
geothermal  brine  processing facilities at the  Vulcan  and  Del
Ranch  Projects to incorporate the pH Modification Process, which
has  reduced operating costs at the Salton Sea Project.   The  CE
Turbo Project and the Region 2 brine facilities construction  are
being  constructed  by  SWEC pursuant to a  date  certain,  fixed
price, turnkey engineering, procurement and construction contract
(the  "Region 2 Upgrade EPC Contract").  The obligations of  SWEC
will  be  guaranteed  by Stone & Webster, Incorporated.   The  CE
Turbo Project is scheduled to commence initial operations in mid-
2000  and the Region 2 Brine Facilities Construction is scheduled
to be completed in early-2000.

Philippines

       Casecnan.   In  November  1995,  the  Company  closed  the
financing  and commenced construction of the Casecnan Project,  a
combined irrigation and 150 net MW hydroelectric power generation
project  (the "Casecnan Project") located in the central part  of
<PAGE>
the  island  of  Luzon in the Republic of the  Philippines.   The
Casecnan  Project will consist generally of diversion  structures
in  the  Casecnan and Taan (Denip) Rivers that will divert  water
into  a  tunnel of approximately 23 kilometers.  The tunnel  will
transfer the water from the Casecnan and Taan (Denip) Rivers into
the Pantabangan Reservoir for irrigation and hydroelectric use in
the Central Luzon area.  An underground powerhouse located at the
end of the water tunnel and before the Pantabangan Reservoir will
house  a power plant consisting of approximately 150 MW of  newly
installed  rated  electrical  capacity.   A  tailrace  tunnel  of
approximately three kilometers will deliver water from the  water
tunnel  and  the  new  powerhouse to the  Pantabangan  Reservoir,
providing  additional  water for irrigation  and  increasing  the
potential  electrical  generation  of  two  downstream   existing
hydroelectric facilities of the NPC.

      CE  Casecnan  Water and Energy Company, Inc., a  Philippine
corporation ("CE Casecnan") which is expected to be at least  70%
indirectly  owned  by  the  Company, is developing  the  Casecnan
Project  under  the  terms of the Project  Agreement  between  CE
Casecnan  and  the  National Irrigation  Administration  ("NIA").
Under  the  Project Agreement, CE Casecnan will develop,  finance
and  construct the Casecnan Project over the construction period,
and  thereafter own and operate the Casecnan Project for 20 years
(the  "Cooperation Period").  During the Cooperation Period,  NIA
is obligated to accept all deliveries of water and energy, and so
long  as  the Casecnan Project is physically capable of operating
and  delivering in accordance with agreed levels set forth in the
Project Agreement, NIA will pay CE Casecnan a guaranteed fee  for
the  delivery of water and a guaranteed fee for the  delivery  of
electricity,  regardless of the amount of  water  or  electricity
actually  delivered.  In addition, NIA will pay  a  fee  for  all
electricity  delivered in excess of a threshold amount  up  to  a
specified amount.  NIA will sell the electricity it purchases  to
NPC,  although NIA's obligations to CE Casecnan under the Project
Agreement  are not dependent on NPC's purchase of the electricity
from  NIA.  All fees to be paid by NIA to CE Casecnan are payable
in  U.S. dollars.  The guaranteed fees for the delivery of  water
and  energy  are  expected  to provide approximately  70%  of  CE
Casecnan's revenues.

      The  Project Agreement provides for additional compensation
to  CE  Casecnan upon the occurrence of certain events, including
increases  in Philippine taxes and adverse changes in  Philippine
law.   Upon the occurrence and during the continuance of  certain
force majeure events, including those associated with Philippines
political  action,  NIA  may be obligated  to  buy  the  Casecnan
Project  from CE Casecnan at a buy out price expected  to  be  in
excess  of  the aggregate principal amount of the outstanding  CE
Casecnan  debt  securities,  together  with  accrued  but  unpaid
interest.   At  the end of the Cooperation Period,  the  Casecnan
Project  will  be  transferred to NIA and NPC for  no  additional
consideration on an "as is" basis.

      The  Republic of the Philippines has provided a Performance
Undertaking  under  which  NIA's obligations  under  the  Project
Agreement  are  guaranteed by the full faith and  credit  of  the
Republic  of  the  Philippines.  The Project  Agreement  and  the
Performance Undertaking provide for the resolution of disputes by
binding  arbitration in Singapore under international arbitration
rules.

      CE  Casecnan  entered  into a fixed  price,  date  certain,
turnkey  engineering,  procurement and construction  contract  to
complete  the construction of the Casecnan Project (the "Casecnan
Construction   Contract").    The   work   under   the   Casecnan
Construction   Contract  is  being  conducted  by  a   consortium
consisting of Cooperativa Muratori Cementisti CMC di Ravenna  and
Impresa  Pizzarotti & C. Spa working together with Siemens  A.G.,
Sulzer  Hydro Ltd., Black & Veatch and Colenco Power  Engineering
Ltd.   The construction of the Casecnan Project is proceeding  on
schedule and is expected to be completed in 2000.
<PAGE>
Indonesia

      On  December 2, 1994, subsidiaries of the Company, Himpurna
California  Energy Ltd., ("HCE") and Patuha Power,  Ltd.  ("PPL",
together   with  HCE,  the  "Indonesian  Subsidiaries")  executed
separate  joint  operation contracts for the development  of  the
geothermal steam field and geothermal power facilities located in
Central Java in Indonesia with Perusahaan Pertambangam Minyak Dan
Gas  Cumi  Negara  ("Pertamina"),  the  Indonesian  national  oil
company,   and  executed  separate  "take-or-pay"  energy   sales
contracts with both Pertamina and P.T. PLN (Persero) ("PLN"), the
Indonesian   national  electric  utility.   The   Government   of
Indonesia provided sovereign guarantees of the obligations  under
the "take-or-pay" contracts.

      In  1997 and 1998 a series of Indonesian government decrees
and  other  actions  (including the non-payment  of  all  monthly
invoices  from  HCE's  Dieng Unit I which became  operational  in
March  1998) have created significant uncertainty as  to  whether
PLN  and  the  Indonesian government will honor their contractual
obligations  to  the  Indonesian  Subsidiaries.   The  Indonesian
Subsidiaries  in  1998  initiated dispute  resolution  procedures
under  the  ESCs  and  sovereign  guarantees  with  PLN  and  the
Government of Indonesia and subsequently commenced arbitration to
resolve  the dispute and they intend to continue to take  actions
to  require  the Government of Indonesia to honor its contractual
obligations.   However,  actions by the Government  of  Indonesia
have  created  significant risks to the Indonesian  Subsidiaries.
Dieng  Unit  I  was operationally and contractually completed  in
March  1998 when the "take-or-pay" obligations under its contract
with   PLN  commenced.   However,  PLN  has  defaulted   on   the
contractually  required  and sovereign  guaranteed  "take-or-pay"
payment  obligations.  Accordingly, the arbitration is proceeding
before an international arbitration panel, as provided under  the
Indonesian  Subsidiaries' contracts with  PLN.   The  arbitration
involves both PLN and the Government of Indonesia and is expected
to conclude in the third quarter of 1999.



                     PROJECTS IN DEVELOPMENT
                                
       The   following  is  a  summary  description  of   certain
information  concerning the Company's advanced stage  development
projects. Since these projects are still in development there can
be  no assurance that this information will not change materially
over   time.  In  addition,  there  can  be  no  assurance   that
development  efforts on any particular project, or the  Company's
development efforts generally, will be successful. See also "Risk
Factors"  contained in the Company's Report  on  Form  8-K  dated
March 26, 1999, incorporated herein by reference.

United States

      Salton  Sea  Minerals Extraction.    In  addition  to  zinc
recovery,  the Company intends to sequentially develop manganese,
silver,  gold,  lead,  boron, lithium and other  products  as  it
further  develops  the  extraction  technology.  If  successfully
developed for the other products, the mineral extraction  process
will provide an environmentally responsible and low cost minerals
recovery methodology. The Company is also investigating producing
silica  from the solids precipitated out of the geothermal  power
process.  Silica is used as a filler for such products as  paint,
plastics and high temperature cement.

     Telephone Flat.   The Company is developing a 48 net MW
geothermal project at Telephone Flat in Northern California where the
Company has two successful production wells (the "Telephone Flat
Project").  Under an amended contract arrangement with the Bonneville
Power Administration ("BPA"), BPA will purchase 30 MW from the
project and has an option to purchase an additional 100 MW. The
completion of the project and BPA's purchase obligation are subject
to obtaining a final environmental impact statement relating to the
new site location.
<PAGE>
      Cordova.    The power station is a nominal 500 MW gas-fired
generating  plant  that is targeted for completion  in  the  late
spring of 2001.  The preferred site for the power station is near
Cordova,  Il.,  northeast of the Quad Cities.   The  Quad  Cities
Energy  Company  has  signed contracts for five  major  equipment
components for the planned electric power station near  the  Quad
Cities.   The Quad Cities Energy Company which is developing  the
project through a subsidiary, is a subsidiary of the Company.

     With its strategic location in the Quad Cities area, it will
border  on two electric reliability districts:  the Mid-Continent
Area  Power Pool and the MidAmerica Interconnected Network.   The
plant  will  also  feature highly efficient operations,  flexible
transmission access and competitive gas supply.

United Kingdom

      Exeter. Exeter Power Limited ("Exeter") is a company  owned
50%  by  Northern Electric Generation Limited and 50%  by  Rolls-
Royce  Power Ventures. Exeter is developing a 50 net MW gas-fired
power  plant at Exeter, England. This project is based  upon  the
U.K. "Mid-merit" model (described below) and will be managed  and
operated  by  Northern  upon  commercial  operation.  The   power
purchase contract and permits for the project are currently being
finalized.

      U.K.  Mid-merit  Projects.  The Company,  through  Northern
Generation,   is   pursuing  a  number  of  "Mid-merit"   project
opportunities  in addition to Exeter and Viking,  in  conjunction
with  and separate from Rolls-Royce.  However, the gas moratorium
in  the U.K. has significantly adversely impacted the ability  to
develop these projects.

       "Mid-merit"  projects  are  those  projects   which   have
generation  units having a registered capacity of 50  net  MW  or
less.  As  a  result, these projects only require local  planning
permission  and limited central government permits. In  addition,
these projects are connected to the local distribution system and
not the National Grid, which means these projects do not have  to
be  a  member of the Pool and pay generator related grid and Pool
charges.   These  Mid-merit  generating  projects  are  also  not
subject  to  central dispatch by the National Grid and  therefore
allow  for the potential of gas arbitrage between the electricity
day-ahead pool market and the within-day gas spot market.

      Finally,  these projects are based on open  (simple)  cycle
aero derivative gas turbines which are ideally suited to multiple
start/stop   operations.   This  flexible   capability   provides
significant  economic benefits to Northern's  electricity  supply
business  in  buying  electricity from the  Mid-merit  plant  and
avoiding pool purchases at high pool price times and making  Pool
purchases  when  the  Pool price is below the  Mid-merit  plant's
marginal costs.

      U.K.  Gas Transportation and Storage.  The Company, through
CE  Gas,  is pursuing a number of gas transportation and  storage
opportunities  in  the  U.K.  to integrate  with  its  North  Sea
upstream gas production operations.


    Producing Gas Field Operations and Fields in Development
                                
      CE  Gas UK Limited. CE Gas UK Limited ("CE Gas") is  a  gas
exploration and production company which is focused on developing
integrated  upstream  gas projects. Its "upstream  gas"  business
consists   of   the  exploration,  development  and   production,
including  transportation and storage, of gas for delivery  to  a
point  of  sale  into  either a gas  supply  market  or  a  power
generation  facility.  CE  Gas holds  various  interests  in  the
southern basin of the United Kingdom sector of the North Sea,  as
described  below. Also as is more fully discussed below,  CE  Gas
has  recently  been  involved  in  certain  gas  development  and
exploration activities relating to a large gas field prospect  in
Poland  and the Gingin field in the Perth Basin in Australia  and
the Yolla discovery in the Bass Basin of Australia.
<PAGE>
The  Company's  Producing  Gas Field  Operations  and  Fields  in
Development
                                
PRODUCING GAS FIELDS              SHARE OF    CURRENT         LOCATION
                                  REMAINING    % WORKING
                                  RESERVES    INTEREST
                                  BCF1
                                                              
                                                              
Windermere                        12.0        20.000%         U.K. Offshore
                                                              (North Sea)
Victor                            10.3        5.000%          U.K. Offshore
                                                              (North Sea)
Schooner                          10.0        2.078%          U.K. Offshore
                                                              (North Sea)
Johnston                          23.1        18.264%2        U.K. Offshore
                                                              (North Sea)
FIELDS IN DEVELOPMENT             Size Km2                    
                                                              
Pila Concession                   13,0003     100%            N.W. Poland
                                                              (Polish Trough)
Gingin Concession                 2,960       36.000%         S.W. Australia
                                                              Onshore
                                                              (Perth Basin)
Yolla Discovery                   550         20.000%         S.E. Australia
                                                              Offshore
                                                              (Botts Basin)

Producing Fields

      Windermere  Field. The Windermere Field is located  in  the
Eastern  part  of the Southern North Sea approximately  62  miles
east of Hull on the U.K. coast and has Remaining reserves of 12.0
bcf  net to CE Gas. The field is produced by an unmanned platform
which has two wells. The gas is transported via an 8" pipeline to
the Markham Field where it is processed, compressed and delivered
through the K13 pipeline system to the Den Helder terminal on the
Netherlands  coast. CE Gas holds a 20% working interest  in  this
field which commenced production in April 1997 and currently  has
average  net  daily  production of 9.0 MM scfd (million  standard
cubic feet per day). Gas is sold to N.V. Nederlandse Gasunie.

     Victor Field. The Victor gas field is located in the central
part  of  the Southern North Sea, approximately 80 miles east  of
the  Theddlethorpe  terminal  on  the  U.K.  coast  and  has  net
Remaining  reserves  of  10.3 bcf net  to  CE  Gas.  An  unmanned
platform  is  installed and the field produces from 5  production
wells and a sixth subsea well tied back to the platform. The  gas
is  exported through a 16" pipeline to the Viking field and  then
onwards to the Theddlethorpe shore terminal. The Victor field has
been  in  production  since September  1984,  and  currently  has
average  daily  production of 5.2 MM scfd and sells  its  gas  to
British  Gas Trading Limited. CE Gas holds a 5% working  interest
in this field.

1  Gas reserves in Billion cubic feet (or "Bcf") as of December 31, 1998.
The Classification "Remaining" means reserves which geophysical, geological
and engineering data indicate to be in place or recoverable (as the case
may be) with a 50% probability the reserves will exceed the estimate.

2  Currently in the process of finalizing.

3  Subject to 25% relinquishment after every 2 years during the 8 year contract
term based on work program results.
<PAGE>
      Schooner  Field.  The  Schooner Field  is  located  in  the
Northern  part  of  the  Southern North  Sea  and  has  Remaining
reserves  of  10.0  bcf.  The field is produced  by  an  unmanned
platform  which is tied back through a 28km 16" flowline  to  the
Murdoch  platform. Production is achieved from six wells  with  a
seventh  well  planned for 1999.  The gas is transported  through
the  CMS  pipeline  to the Theddlethorpe shore terminal.  CE  Gas
holds  a  2.078%  working interest in the Schooner  Field,  which
commenced  production in October 1996 and currently  has  average
net  daily production of 2.4 MM scfd. The CE Gas share of the gas
is sold to Northern.

      Johnston Field.  The Johnston gas field is located  in  the
Southern  North  Sea  approximately  56  miles  north   east   of
Scarborough on the U.K. coast and has Remaining reserves of  23.1
bcf net to CE gas.  The field is produced from three subsea wells
tied  back  to  the Ravenspurn North field via a  4.5  mile,  12"
pipeline.   Gas  is  exported  via  the  Cleeton  field  to   the
Dimlington  terminal via a 33 mile, 36" pipeline.   The  Johnston
field  has  been in production since October 1994 at  an  average
daily rate of 53 MMscfd.  Gas is sold to Eastern Natural Gas.  CE
Gas has a 18.264% working interest in this field and is currently
in  the  process  of finalizing an equity redefinition  for  this
field which is expected to increase our ownership to 22.113%.

Projects in Development

      Pila.   In  August  1997,  CE  Gas  signed  an  eight  year
concession  development  agreement  with  the  Polish  government
providing  it with the exclusive right (a 100% working  interest)
to  develop  the extensive (13,000 square kilometers) undeveloped
Pila gas concession in the Polish Trough in northwest Poland.  CE
Gas  is  committed to a seismic and drilling work program  within
the concession over that period, subject to relinquishment of  up
to  25%  of the concession area after every two years, with  only
developed areas to be retained by CE Gas at the end of the  eight
year  term.  The Company believes that there is the potential  to
structure an integrated upstream gas/power generation project  at
the  Pila concession, subject to (among other things) identifying
a  suitable  site  and  negotiating an acceptable  power  offtake
agreement.

      Gingin  Gas Field. In August 1997, CE Gas signed an earn-in
agreement  with  Empire Oil of Australia, the permit  holder  for
various  concession areas in the Gingin field in the Perth  Basin
in  Western Australia. The earn-in agreement provides CE Gas with
the  ability, through a seismic and drilling phased work program,
to  obtain  up  to a 50% working interest in the main  concession
area  totaling  2,960 square kilometers and up to a  33%  working
interest in four ancillary concession areas totaling 9,451 square
kilometers. Gingin gas reserves are estimated by Empire Oil to be
470  bcf.  Given  the advantages of the location  of  the  Gingin
field,  in  close  proximity to an industrial area  and  electric
residential  load center, the Company believes  that  the  Gingin
field   possesses  the  potential  for  an  integrated   upstream
gas/power generation project.

      Both electricity and gas are in the process of being opened
up  for  competition in Australia. 95% of all gas to SW Australia
is  currently  supplied  from the NW shelf  (Dampier  to  Bunbury
pipeline--1500km). The Onshore Perth Basin is  known  to  be  gas
prone    but    has   been   significantly   underexplored    and
underdeveloped.  Historically, gas has been  a  state  controlled
energy  sector in Australia. The Gingin field proved gas  in  the
early 1970s. The Company believes that new technologies now offer
the  potential  for extracting significant gas  reserves  through
more  advanced recovery methods, and the Company, which currently
beneficially owns a 36% interest in the Gingin Concession,  which
has  been earned under a phased seismic and drilling work program
with Empire Oil  of Australia.

      Yolla Gas Discovery.  The Yolla gas field was discovered in
1985  and is located offshore, approximately 120 kilometers  from
the  coast  of  Tasmania and 200 kilometers  from  the  coast  of
Victoria  in  Australia.  In 1998, CEGas entered into  an  option
agreement  with  Boral  Energy  Resources  Limited  and   Premier
Petroleum (Australia) Limited to earn interests in three  permits
in  the  Bass  Basin  located in the  south  east  of  Australia,
including the Yolla gas discovery.


          Regulatory, Energy and Environmental Matters
<PAGE>
United States

     The Company is subject to a number of environmental laws and
other  regulations  affecting many aspects  of  its  present  and
future  operations, including the construction or  permitting  of
new  and existing facilities, the drilling and operation  of  new
and existing wells and the disposal of various geothermal solids.
Such laws and regulations generally require the Company to obtain
and  comply  with a wide variety of licenses, permits  and  other
approvals. No assurance can be given, however, that in the future
all  necessary  permits and approvals will be  obtained  and  all
applicable  statutes and regulations complied with. In  addition,
regulatory compliance for the construction of new facilities is a
costly  and  time-consuming process, and  intricate  and  rapidly
changing environmental regulations may require major expenditures
for  permitting  and  create  the risk  of  expensive  delays  or
material  impairment of project value if projects cannot function
as  planned  due  to  changing regulatory requirements  or  local
opposition.  The  Company  believes  that  its  operating   power
facilities  are  currently  in  material  compliance   with   all
applicable  federal, state and local laws and regulations.  There
can be no assurance that existing regulations will not be revised
or  that new regulations will not be adopted or become applicable
to  the  Company  which  could have  an  adverse  impact  on  its
operations.  In particular, the independent power market  in  the
United  States  is  dependent on the existing  energy  regulatory
structure,  including  PURPA and its  implementation  by  utility
commissions in the various states.

      Each  of  the operating domestic power facilities partially
owned  through  CE Generation meets the requirements  promulgated
under  PURPA  to  be  qualifying facilities. Qualifying  facility
status   under  PURPA  provides  two  primary  benefits.   First,
regulations  under  PURPA exempt qualifying facilities  from  the
Public Utility Holding Company Act of 1935, as amended ("PUHCA"),
most  provisions  of the Federal Power Act (the  "FPA")  and  the
state  laws concerning rates of electric utilities, and financial
and  organization  regulations  of  electric  utilities.  Second,
FERC's  regulations  promulgated under  PURPA  require  that  (1)
electric  utilities purchase electricity generated by  qualifying
facilities,  the  construction of which  commenced  on  or  after
November  9,  1978, at a price based on the purchasing  utility's
full  Avoided  Cost,  (2)  the  electric  utility  sell  back-up,
interruptible,  maintenance  and  supplemental   power   to   the
qualifying  facility on a non-discriminatory basis, and  (3)  the
electric utility interconnect with a qualifying facility  in  its
service territory.

     Currently, Congress is considering proposed legislation that
would  amend PURPA by eliminating the requirement that  utilities
purchase  electricity from qualifying facilities at prices  based
on  Avoided  Costs.  The  Company  does  not  know  whether  such
legislation will be passed or what form it may take. The  Company
believes  that if any such legislation is passed, it would  apply
to new projects only and thus, although potentially impacting the
Company's ability to develop new domestic projects, it would  not
affect the Company's existing qualifying facilities. There can be
no  assurance,  however, that any legislation  passed  would  not
adversely impact the Company's existing domestic projects.

      In  addition,  many states are implementing or  considering
regulatory  initiatives designed to increase competition  in  the
domestic  power  generation  industry  and  increase  access   to
electric  utilities'  transmission and distribution  systems  for
independent   power  producers  and  electricity  consumers.   On
September 1, 1996, the California legislature adopted an industry
restructuring bill that would provide for a phased-in competitive
power  generation  industry  with a power  pool  and  independent
system operator and also would permit direct access to generation
for all power purchasers outside the power exchange under certain
circumstances.  Under the bill, consistent with the  requirements
of  PURPA,  existing qualifying facilities power sales agreements
would  be honored. The Company cannot predict the final  form  or
timing  of the proposed industry restructuring or the results  of
its operations.

      The Clean Air Act Amendments ("CAAA") were signed into  law
in  November 1990.  MidAmerican Energy has five jointly owned and
six  wholly  owned coal-fired generating units,  which  represent
approximately  65%  of MidAmerican Energy's  electric  generating
capability.  Essentially all utility generating units are subject
to  the provisions of the CAAA which address continuous emissions
monitoring, permit requirement and fees and emissions of  certain
substances.   Under current regulations, MidAmerican Energy  does
not  anticipate  its construction costs for the  installation  of
<PAGE>
emissions monitoring system upgrades through 2000 to be material.
MidAmerican  Energy's generating units meet  all  Title  IV  CAAA
requirements through 2007.  Title IV of the CAAA, which  is  also
known  as the Acid Rain Program, sets forth requirements for  the
emission  of  sulfur  dioxide  and nitrogen  oxides  at  electric
utility generating stations.

       State  and  federal  environmental  laws  and  regulations
currently have, and future modifications may have, the effect  of
(i)  increasing  the  lead  time  for  the  construction  of  new
facilities, (ii) significantly increasing the total cost  of  new
facilities,  (iii)  requiring  modification  of  certain  of  the
Company's existing facilities, (iv) increasing the risk of  delay
on  construction projects, (v) increasing the Company's  cost  of
waste  disposal  and  (vi) possibly reducing the  reliability  of
service  provided  by  the  Company  and  the  amount  of  energy
available from the Company's facilities.  Any of such items could
have  a substantial impact on amounts required to be expended  by
the Company in the future.

      The  structure of such federal and state energy regulations
have  in  the  past,  and may in the future, be  the  subject  of
various  challenges and restructuring proposals by utilities  and
other  industry  participants. The implementation  of  regulatory
changes  in  response to such changes or restructuring proposals,
or   otherwise   imposing   more   comprehensive   or   stringent
requirements  on  the  Company, which would result  in  increased
compliance  costs, could have a material adverse  effect  on  the
Company's results of operations.

United Kingdom

      Northern's  businesses are subject to  numerous  regulatory
requirements  with respect to the protection of the  environment.
The  Electricity Act obligates the UK Secretary of State  or  the
Regulator   to  take  into  account  the  effect  of  electricity
generation, transmission and supply activities upon the  physical
environment  when approving applications for the construction  of
generating  facilities and the location of overhead power  lines.
The   Electricity   Act  requires  Northern   to   consider   the
desirability of preserving natural beauty and the conservation of
natural  and  man-made features of particular interest,  when  it
formulates  proposals for development in connection with  certain
of  its  activities. Northern mitigates the effects its proposals
have  on  natural  and  man-made  features  and  administers   an
environmental assessment when it intends to lay cables, construct
overhead  lines or carry out any other development in  connection
with its licensed activities.

      The  Environmental  Protection  Act  1990  addresses  waste
management issues and imposes certain obligations and  duties  on
companies  which handle and dispose of waste. Some of  Northern's
distribution activities produce waste, but Northern believes that
it is in compliance with the applicable standards in such regard.

      Possible  adverse health effects of electromagnetic  fields
("EMFs")   from  various  sources,  including  transmission   and
distribution lines, have been the subject of a number of  studies
and increasing public discussion. Current scientific research  is
inconclusive as to whether EMFs may cause adverse health effects.
The only United Kingdom standards for exposure to power frequency
EMFs   are   those  promulgated  by  the  National   Radiological
Protection  Board  and  relate to the  levels  above  which  non-
reversible physiological effects may be observed. Northern  fully
complies  with these standards. However, there is the possibility
that  passage  of legislation and change of regulatory  standards
would require measures to mitigate EMFs, with resulting increases
in capital and operating costs. In addition, the potential exists
for  public  liability  with  respect  to  lawsuits  brought   by
plaintiffs alleging damages caused by EMFs.

      Northern believes that it has taken and continues  to  take
measures  to  comply  with the applicable laws  and  governmental
regulations for the protection of the environment. There  are  no
material  legal  or  administrative proceedings  pending  against
Northern with respect to any environmental matter.

      In  March  1998 the United Kingdom Government  published  a
consultation on utility regulation.  This paper outlined a number
of proposals for discussion.  The stated objectives are "fairness
and  efficiency"  which  the Government regard  as  "the  key  to
securing  a long-term, stable and effective framework capable  of
serving  consumers well and of taking these industries  into  the
next  millennium".   Some  of the proposals  under  consideration
would require legislative changes.
<PAGE>
                                
                            Employees

      At  December  31,  1998, the Company and  its  subsidiaries
employed  approximately 4,500 people. Neither the Falcon Projects
nor  the Imperial Valley Project partnerships hire or retain  any
employees.   All  employees necessary to operate the  Falcon  and
Imperial  Valley  Projects  are provided  by  affiliates  of  the
Company  under certain administrative services and operation  and
maintenance  agreements. International development activities  in
Indonesia  and  the  Philippines  are  principally  performed  by
employees  of  affiliates of the Company and operations  will  be
performed  by  employees  of  the  local  project  entities.  The
Company's Indonesian and Philippine affiliates currently maintain
offices in Manila and Jakarta.

     Of Northern's employees, at December 31, 1998, approximately
75%  are represented by labor unions. All Northern employees  who
are  not  party to a personal employment contract are subject  to
collective  bargaining  agreements  that  are  covered  by  eight
separate  business agreements. These arrangements may be  amended
by  joint  agreement between the trade unions and the  individual
business  through negotiation in the appropriate  Joint  Business
Council.  Northern believes that its relations with its employees
are good.

       MidAmerican   Energy  and  its  affiliates   (other   than
MidAmerican Realty Services) employed approximately 3,900  as  of
December 31, 1998 approximately one half of which are represented
by  labor unions.  MidAmerican Realty Services and its affiliates
employed more than 1,150 persons and retained an additional 4,500
sales  agents  as  of  December  31,  1998.   MidAmerican  Energy
believes that its relations with its employees are good.

Item 2.   Properties

      Property.     Northern owns the freehold of  its  principal
executive  offices in Newcastle upon Tyne, England. Northern  has
both  network and non-network land and building. At December  31,
1998,   Northern   had  freehold  and  leasehold   interests   in
approximately  7,500  network properties, comprising  principally
sub-station sites. The recorded historical cost account net  book
value  of  total network land and buildings at December 31,  1998
was  pounds  sterling 23.9 million. Northern  owns,  directly  or
indirectly, the freehold or leasehold interests of such land  and
buildings.  At  December  31,  1998  Northern  had  freehold  and
leasehold  interests  in approximately 95 non-network  properties
comprising  chiefly  offices,  former  retail  outlets,   depots,
warehouses  and workshops. The recorded historical  cost  account
net  book  value  of  total non-network  land  and  buildings  at
December 31, 1998 was pounds sterling 25.6 million.

      MidAmerican Energy's utility properties consist of physical
assets  necessary and appropriate to rendering electric  and  gas
service  in its service territories.  Electric property  consists
primarily    of   generation,   transmission   and   distribution
facilities.   Gas  property  consists primarily  of  distribution
plant,  including feeder lines to communities served from natural
gas  pipelines owned by others.  It is the opinion of  management
that  the  principal depreciable properties owned by  MidAmerican
Energy are in good operating condition and well maintained.   The
electric  transmission system of MidAmerican Energy  at  December
31, 1998, included 896 miles of 345-kV lines, 1,294 miles of 161-
kV  lines, 1,796 miles of 69-kV lines and 34.5-kV lines.  The gas
distribution  facilities of MidAmerican Energy  at  December  31,
1998,   included  19,428  miles  of  gas  mains   and   services.
Substantially  all  the  former Iowa-Illinois  Gas  and  Electric
Company (predecessor to MidAmerican Energy) utility property  and
franchises,  and  substantially all of the former  Midwest  Power
Systems Inc. (predecessor to MidAmerican Energy) electric utility
property  located in Iowa, or approximately 80% of gross  utility
plant, is pledged to secure mortgage bonds.

      The  Company's most significant physical properties,  other
than  those  owned by Northern and MidAmerican  Energy,  are  its
current interest in operating power facilities, its plants  under
construction  and  related real property interests.  The  Company
also  maintains  an inventory of approximately 200,000  acres  of
geothermal  property  leases. The Company  leases  its  principal
executive offices and its offices in Jakarta and Manila.  Certain
of  the  producing acreage owned by Magma is leased  to  Mammoth-
<PAGE>
Pacific  as owner and operator of the Mammoth Plants, and  Magma,
as  lessor, receives royalties from the revenues earned  by  such
power plants. The Company, as lessee, pays certain royalties  and
other  fees  to  the property owners and other  royalty  interest
holders  from  the  revenue  generated  by  the  Imperial  Valley
Project.

      Lessors and royalty holders are generally paid a monthly or
annual  rental  payment during the term of the lease  or  mineral
interest  unless and until the acreage goes into  production,  in
which  case the rental typically stops and the (generally higher)
royalty payments begin. Leases of federal property are transacted
with  the  Department  of Interior, Bureau  of  Land  Management,
pursuant to standard geothermal leases under the Geothermal Steam
Act    and   the   regulations   promulgated   thereunder    (the
"Regulations"),  and  are  for  a  primary  term  of  10   years,
extendible for an additional five years if drilling is  commenced
within  the  primary  term  and is  diligently  pursued  for  two
successive five-year periods upon certain conditions set forth in
the  Regulations. A secondary term of up to 40 years is available
so  long  as  geothermal resources from the  property  are  being
produced or used in commercial quantities. Leases of state  lands
may  vary  in  form.  Leases of private lands vary  considerably,
since  their terms and provisions are the product of negotiations
with the landowners.


Item 3.   Legal Proceedings

      The  Company  is not a party to any material pending  legal
proceedings.  However,  as  described  herein,  certain  of   the
Company's projects are parties to litigation or other disputes.

Item 4.   Submission of Matters to a Vote of Security Holders.

                                
Not applicable.
<PAGE>
                             PART II
   Item 5.   Market for Registrant's Common Equity and Related
                      Stockholder's Matters
                                
                                
      The  Common Stock is listed on the New York Stock  Exchange
(the  "NYSE"),  the Pacific Stock Exchange and the  London  Stock
Exchange  under the symbol "MEC." The following table sets  forth
for  the fiscal quarters indicated the high and low last reported
sale prices of the Common Stock as reported on the NYSE Composite
Tape.


                             PRICE  RANGE
                               
                             HIGH     LOW
                                       
                                       
Fiscal Year Ending December
31, 1998

Fourth Quarter              34.6875 24.6875
Third Quarter               30.6875 22.9375
Second Quarter              33.8125 28.1875
First Quarter               31.3125 23.25
                                       
                                       
Fiscal Year Ending December
31, 1997

Fourth Quarter              39.625  28.00
Third Quarter                41.75  30.9375
Second Quarter              41.625  32.625
First Quarter               38.375  32.125
                                       
Fiscal Year Ending December
31, 1996

Fourth Quarter              33.625  28.125
Third Quarter               31.875  22.875
Second Quarter              28.375   24.00
First Quarter               26.875  18.375

      On  March  29, 1999, the last reported sale  price  of  the
Common  Stock on the NYSE Composite Tape was $27 15/16 per share.
As  of March 29, 1999, there were approximately 1,042 holders  of
record  of the Common Stock. The Company's present policy  is  to
reinvest  earnings in the business and pay no  dividends  on  its
Common Stock.

      The  Company's 9 1/2% senior notes due 2006 and the Company's
7.63%  senior  notes  due  2007  restrict  the  payment  of  cash
dividends  based upon a formula and limit the amount of dividends
and  other  distributions generally to no more than  50%  of  the
Company's   accumulated  adjusted  consolidated  net  income   as
defined,  subsequent to April 1, 1994, plus the proceeds  of  any
stock issuance.

      The  Company's  ability to pay dividends is dependent  upon
receipt  of  dividends or other distributions from the  Company's
subsidiaries and the partnerships and joint ventures in which the
Company has interests. The availability of distributions from the
Company's subsidiaries is subject to the satisfaction of  various
covenants  and  conditions contained in the  venture's  financing
documents  (such as those contained in the Salton Sea Funding  or
international  project  financing  documents)  and  the   Company
anticipates  that  future project level financings  will  contain
certain  conditions and similar restrictions on the  distribution
of cash flow to the Company.
<PAGE>
Item 6.   Selected Financial Data

      There  is  hereby incorporated by reference the information
which appears under the caption "Selected Financial Data" in  the
Annual Report.

Item  7.    Management's  Discussion and  Analysis  of  Financial
Condition and Results of Operations

      There  is  hereby incorporated by reference the information
which  appears  under  the caption "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" in the
Annual Report.

Item  7A.  Qualitative and Quantitative Disclosures About  Market
Risk

      There  is  hereby incorporated by reference the information
which  appears  under the caption "Qualitative  and  Quantitative
Disclosures About Market Risk" in the Annual Report.

Item 8.   Financial Statements and Supplementary Data

      There  is  hereby incorporated by reference the information
which  appears in the Consolidated Financial Statements and notes
thereto in the Annual Report.

Item  9.    Changes  in  and Disagreements  with  Accountants  on
Accounting and Financial Disclosure

     Not applicable.
<PAGE>
                            PART III

                           MANAGEMENT
                                
                                
Item 10.  Directors, Executive and Other Officers of the Company
and Significant Subsidiaries

     There is hereby incorporated by reference the information
which appears under the caption "Information Regarding Nominees
for Election as Directors and Directors Continuing in Office at
the Annual Meeting" in the Proxy Statement. The Company's
management structure is organized functionally and the current
executive and other officers of the Company and their positions
are as follows:

Name                           Position                                Company

David L. Sokol      Chairman of the Board and Chief Executive Officer MEHC, MEC,
                                                                       Northern
Gregory E. Abel     President and Chief Operating  Officer             MEHC, 
                                                                       Northern
Alan L. Wells       Senior Vice President and Chief  Financial Officer MEHC, MEC
Steven A. McArthur  Senior Vice President, Mergers and
                    Acquisitions and Secretary                         MEHC
John A. Rasmussen   Senior Vice President and General Counsel          MEHC, MEC
Patrick J. Goodman  Senior Vice President and Chief Accounting Officer MEHC, MEC
Robert S.Silberman  Senior Vice President and Chief 
                    Administrative Officer                             MEHC
Douglas L. Anderson Vice President and Assistant General Counsel       MEHC
Edward F. Bazemore  Vice President, Human Resources/IPP                MEHC
Robert Beck         Director, Year 2000 Worldwide Project              MEHC
Vincent R. Fesmire  Vice President, Construction and Engineering       MEHC
James A. Flores     Vice  President,  Project   Finance                MEHC
Adrian M. Foley III Vice President, Marketing                          MEHC
Ronald J. Giaier    Vice President, Investor Relations  and
                    Risk Management                                    MEHC
Brian K. Hankel     Vice President and Treasurer                       MEHC
Keith D. Hartje     Vice  President,  Human  Resources                 MEHC
Paul J. Leighton    Vice President Corporate Law, Assistant   
                    General Counsel and Assistant Secretary            MEHC
Joseph M. Lillo     Director  Financial  Reporting and
                    Controller/IPP                                     MEHC
Frederick L. Manuel Senior Vice President, CalEnergy Generation        MEHC
Christoph F. Minor  Vice President, Information Technology             MEHC
Patti J. McAtee     Vice President, Corporate Communications           MEHC
James J. Sellner    Director of Taxation,   Corporate                  MEHC
K. Taylor Smith     General Manager, Indonesia and
                    Controller, Asian Operations                       MEHC
Jonathan M. Weisgall Vice President, Federal Regulation/IIPP           MEHC
Russell H. White    Assistant  Vice  President,  General Services      MEHC
Cathy S. Woollums   Vice President, Environmental                      MEHC
Ronald W. Stepien   President                                          MEC
Jack L. Alexander   Senior Vice President, Transmission & Energy
                    Delivery                                           MEC
David C. Caris      Vice President, State  Government  Affairs         MEC
Dwayne J. Coben     Vice  President,  Utility   Development            MEC
Steven  J.  Dust    Vice President, Economic  Development  and
                    Community Relations                                MEC
Brent  E.  Gale     Vice President, Legislation and  Regulation        MEC
James J. Howard     Vice  President,   Regulatory   Affairs            MEC
David J. Levy       Senior   Vice    President    Retail               MEC
J. Sue Rozema       Vice   President   Financial   Services            MEC
Larry M. Smith      Vice   President   and    Controller               MEC
Steven R. Weiss     Assistant General Counsel                          MEC
Beverly A. Wharton  Senior  Vice President,  State  Government
                    Affairs and Regulation                             MEC
<PAGE>
P. Eric Connor      Director  and Managing Director, Utility Services  Northern
Malcolm Chandler    Director  and  Managing  Director, Supply          Northern
Ian S.R. Colquhoun  Managing Director, Northern Metering Services      Northern
Dave Crompton       Managing Director, Retail                          Northern
Alan Dickson        Manager, Tax                                       Northern
David A. Faulkner   Director, Personnel and Corporate  Affairs         Northern
Dr.John M. France   Director of Regulation                             Northern
G. Valerie Giles    Company Secretary                                  Northern
Dr.Philip S.Lawless Managing   Director,   Generation                  Northern
Ken Linge           Director of  Finance                               Northern
David Pearson       Managing  Director,  Marketing  and  Sales         Northern
Steve  Raine        Director,  Information  Systems  Technology        Northern
James D.Stallmeyer  Vice  President  and   General   Counsel           Northern
David  Swan         Managing  Director,  Distribution  Director        Northern
David A. Waters     Managing Director,  Northern  Utility Services     Northern
Peter Youngs        Managing Director, Gas Exploration and Development Northern

     Set forth below is certain information with respect to each of
the foregoing officers:

      DAVID L. SOKOL, 42, Chairman of the Board of Directors  and
Chief Executive Officer.  Mr. Sokol has been CEO since April  19,
1993  and  served as President of MEHC from April 19, 1993  until
January  21, 1995.  Mr. Sokol has been Chairman of the  Board  of
Directors  since  May  1994  and a  director  since  March  1991.
Formerly,  among  other positions held in the  independent  power
industry,  Mr.  Sokol  served as President  and  Chief  Executive
Officer of Kiewit Energy Company, which at that time was a wholly
owned subsidiary of PKS, and Ogden Projects, Inc.

      GREGORY E. ABEL, 36, President and Chief Operating Officer.
Mr.  Abel  joined the Company in 1992.  Mr. Abel is  a  Chartered
Accountant  and  from  1984  to 1992 he  was  employed  by  Price
Waterhouse.   As a Manager in the San Francisco office  of  Price
Waterhouse,  he  was  responsible  for  clients  in  the   energy
industry.

     ALAN L. WELLS, 39, Senior Vice President and Chief Financial
Officer.  Mr.  Wells  has been Senior Vice  President  and  Chief
Financial Officer of MidAmerican Energy since November  1,  1997,
and  was  Vice President of MidAmerican Energy from  November  1,
1996  to November 1, 1997.  Mr. Wells held various executive  and
management positions with MidAmerican Energy from July 1, 1995 to
November  1, 1996, and various executive and management positions
with Iowa-Illinois Electric and Gas from 1993 to 1995. .

      STEVEN A. McARTHUR, 41, Senior Vice President, Mergers  and
Acquisitions and Secretary.  Mr. McArthur joined the  Company  in
February  1991.  From  1988 to 1991 he was  an  attorney  in  the
Corporate  Finance Group at Shearman & Sterling in San Francisco.
From  1984  to  1988 he was an attorney in the Corporate  Finance
Group at Winthrop, Stimson, Putnam & Roberts in New York.

      JOHN  A.  RASMUSSEN,  JR., 53, Senior  Vice  President  and
General Counsel. Mr. Rasmussen has been Senior Vice President and
General Counsel of MidAmerican Energy since November 1, 1996, and
Group  Vice  President and General Counsel from July 1,  1995  to
November  1,  1996.   Prior to that he  was  Vice  President  and
General  Counsel  of Midwest Power Systems, Inc.,  a  predecessor
company, from 1993 to 1995.

      PATRICK  J.  GOODMAN, 32, Senior Vice President  and  Chief
Accounting Officer. Mr. Goodman joined the Company in June  1995,
and served as Manager of Consolidation Accounting until September
1996  when  he was promoted to Controller.  Prior to joining  the
Company,  Mr.  Goodman  was  a  financial  manager  for  National
Indemnity Company and a senior associate at Coopers & Lybrand.

      ROBERT  S. SILBERMAN, 41, Senior Vice President  and  Chief
Administrative Officer. Mr. Silberman joined the Company in 1995.
Prior to that, Mr. Silberman served as Executive Assistant to the
Chairman  and  Chief  Executive Officer  of  International  Paper
Company,  as  Director of Project Finance and Implementation  for
the  Ogden  Corporation  and  as a Project  Manager  in  Business
Development  for Allied-Signal, Inc. He has also  served  as  the
Assistant  Secretary of the Army for the United States Department
of Defense.
<PAGE>
      DOUGLAS  L.  ANDERSON,  41, Vice  President  and  Assistant
General  Counsel.  Mr. Anderson joined the  Company  in  February
1993.  From  1990  to 1993, Mr. Anderson was a business  attorney
with  Fraser, Stryker, Vaughn, Meusey, Olson, Boyer & Bloch, P.C.
in Omaha. From 1987 through 1989, Mr. Anderson was a principal in
the  firm Anderson & Anderson. Prior to that, from 1985 to  1987,
he  was  an attorney with Foster, Swift, Collins & Coey, P.C.  in
Lansing, Michigan.

     EDWARD F. BAZEMORE, 62, Vice President, Human Resources/IPP.
Mr.  Bazemore joined the Company in July 1991. From 1989 to 1991,
he  was Vice President, Human Resources, at Ogden Projects,  Inc.
in  New Jersey. Prior to that, Mr. Bazemore was Director of Human
Resources  for Ricoh Corporation, also in New Jersey. Previously,
he  was  Director  of Industrial Relations for Scripto,  Inc.  in
Atlanta, Georgia.

     ROBERT BECK, 37, Director, Year 2000 Worldwide Project.  Mr.
Beck  has  been  with the company since 1996.  He was  previously
Director, Corporate Information Systems with the Company.   Prior
to  joining  the company, Mr. Beck was an executive  with  Inacom
Corporation  and has held senior management positions  with  AT&T
and US West.

      VINCENT  R.  FESMIRE, 58, Vice President, Construction  and
Engineering.  Mr.  Fesmire joined the Company  in  October  1993.
Since  joining  CalEnergy,  Mr. Fesmire's  responsibilities  have
shifted   from   project   development  and   implementation   to
construction  in  parallel  with  the  status  of  the  Company's
projects. Prior to joining the Company, Mr. Fesmire was  employed
for  19  years with Stone & Webster, an engineering firm, serving
in  various  management level capacities  with  an  expertise  in
geothermal design engineering.

      JAMES A. FLORES, 45, Vice President, Project Finance. Prior
to  joining CalEnergy in May 1994, Mr. Flores was employed for 12
years  with  Mellon Bank, first in its Latin American  Group  and
subsequently in its Project Finance Group.

      ADRIAN  M.  FOLEY, III, 52, Vice President, Marketing.  Mr.
Foley  joined the Company in January 1994 as Project  Development
Manager and continued in that capacity until January 1997 when he
was  promoted  to  Vice President, Marketing.  Prior  to  joining
CalEnergy,  Mr. Foley was Regional Manager, Business  Development
with  Ogden  Projects, Inc. from 1989 to 1993 and Executive  Vice
President with Rescom Development Company from 1980 to 1989.

     RONALD J. GIAIER, 50, Vice President, Investor Relations and
Risk  Management.   Mr.  Giaier  joined  MidAmerican  Energy   in
February,  1998.  Mr. Giaier was previously Assistant  Treasurer-
Finance  and Investor Relations of DTE Energy and Detroit Edison,
its  largest  subsidiary,  Detroit,  Michigan.   Previously,  Mr.
Giaier,  who  had  been  with DTE Energy  since  1970,  had  been
Director of Finance and Investor Relations.

      BRIAN  K.  HANKEL,  36, Vice President and  Treasurer.  Mr.
Hankel  joined  the Company in February 1992 as Treasury  Analyst
and  served  in  that position to December 1995. Mr.  Hankel  was
appointed  to  Assistant  Treasurer  in  January  1996  and   was
appointed  Treasurer  in  January  1997.  Prior  to  joining  the
Company, Mr. Hankel was a Money Position Analyst at FirsTier Bank
of  Lincoln  from  1988  to  1992 and Senior  Credit  Analyst  at
FirsTier from 1987 to 1988.

      KEITH D. HARTJE, 50, Vice President, Human Resources.   Mr.
Hartje   has  been  with  MidAmerican  Energy  Company  and   its
predecessor companies since 1973.  In that time, he  has  held  a
number  of positions with the company, including General  Counsel
and  Corporate  Secretary, District Vice President for  southwest
Iowa operations, and Vice President, Corporate Communications.
<PAGE>
      PAUL  J.  LEIGHTON,  45,  Vice  President,  Corporate  Law,
Assistant General Counsel and Assistant Secretary.  Mr.  Leighton
has  served as Corporate Secretary for MidAmerican Energy and its
predecessor companies since 1988 and as an attorney since 1978.

      JOSEPH  M.  LILLO,  29, Director, Financial  Reporting  and
Controller/IPP.  Mr. Lillo joined Company in November  1996,  and
served  as  Manager of Financial Reporting and  was  promoted  to
Controller/IPP in March 1998.  Prior to joining the Company,  Mr.
Lillo was a senior associate with Coopers & Lybrand LLP.

      FREDERICK  L. MANUEL, 40, Senior Vice President,  CalEnergy
Generation. Mr. Manuel joined the Company in 1991. Prior to that,
he  was  employed  by  Chevron Corporation with  responsibilities
including  land  and offshore drilling, reservoir and  production
engineering, project management and technical research.

       PATTI   J.   MCATEE,   41,   Vice   President,   Corporate
Communications.   Ms.  McAtee joined the Company  in  1995.   Ms.
McAtee  was  previously employed by Bergan Mercy  Medical  Center
since  1984.   Since 1990 she was Marketing and Public  Relations
Manager for the hospital.

      JAMES  J.  SELLNER,  52, Director, Taxation.   Mr.  Sellner
joined  CalEnergy in November, 1997.  Prior to joining CalEnergy,
Mr.  Sellner  was employed by Central and South West  Corporation
and Banc One/MCorp.

       K.  TAYLOR  SMITH,  42,  General  Manager,  Indonesia  and
Controller,  Asian Operations.  Mr. Smith joined the  Company  in
1991.   From  1986  to  1991 Mr. Smith was employed  by  Computer
Technology  Associates,  Inc.  with  responsibilities   including
computer  systems design and development, financial planning  and
management.

       JONATHAN   M.   WEISGALL,  50,  Vice  President,   Federal
Regulation/IPP.  Mr.  Weisgall joined the Company  in  May  1995.
Prior  to  that, Mr. Weisgall was an attorney in private practice
with  extensive energy and regulatory experience and is currently
Adjunct  Professor  of  Energy Law at Georgetown  University  Law
Center.

      RUSSELL  H.  WHITE,  52, Assistant Vice President,  General
Services.   Mr.  White was previously Manager, General  Services.
Mr.   White  joined  the  Company  in  1988  as  Manager,   Asset
Protection.

      CATHY  WOOLLUMS,  38, Vice President,  Environmental.   Ms.
Woollums  was  an  Attorney for Iowa-Illinois  Gas  and  Electric
Company   from  1991-1995.   From  1995-1998,  she  was  Manager,
Environmental Services with MidAmerican Energy Company.

     RONALD W. STEPIEN, 52, President, MidAmerican Energy Company
since  November 1, 1998, and Chief Operating Officer since  March
1999,  Executive Vice President from November 1, 1996 to  October
31, 1998, and Group Vice President from 1995 to November 1, 1996.
Vice  President of Iowa-Illinois Gas and Electric Company  (Iowa-
Illinois), a predecessor company, from 1990 to 1995.

     JACK L. ALEXANDER, 51, Senior Vice President, Transmission &
Energy Delivery.  Mr. Alexander has been Senior Vice President of
MidAmerican  Energy  since  November  1,  1998  and  was  a  Vice
President of MidAmerican Energy from November 1, 1996 to  October
31,  1998,  and  held various executive and management  positions
with  MidAmerican and Midwest Power Systems Inc.,  a  predecessor
company, for more than five years prior thereto.

      DAVE  CARIS, 39, Vice President, State Government  Affairs,
MidAmerican  Energy  Company.  Mr. Caris was  Government  Affairs
Vice  President for MidAmerican Energy from November 1,  1997  to
March  19,  1999  and  Manager of Government  Affairs  for  Iowa-
Illinois Gas & Electric Company, a predecessor company, from 1986-
1995.
<PAGE>
      DWAYNE  J.  COBEN, 40, Vice President, Utility Development,
MidAmerican  Energy Company.  Mr. Coben has been with MidAmerican
Energy   since   August,  1997.   He  was   Director,   Corporate
Development from August 4 to March 1988 and Corporate Development
Vice President from April, 1998 to March, 1999.  Prior to joining
MidAmerican  Energy, Mr. Coben was Controller, Customer  Services
for BC Hydro from December, 1994 to August, 1997 and held various
business development management positions with BC Hydro from 1990
to 1997.

     STEVEN J. DUST, 44, Vice President, Economic Development and
Community Relations, MidAmerican Energy Company.   Mr.  Dust  has
been in his present position since February, 1999.  Mr. Dust  has
over  twenty year's experience in the economic development  field
and  joined MidAmerican Energy as Manager of Economic Development
in  1996.  Prior to joining MidAmerican, Steve was a Principal of
Septagon  Industries, a Midwest firm with holdings in  industrial
construction,   real   estate  development,  manufacturing,   and
communications.

       BRENT  E.  GALE,  47,  Vice  President,  Legislative   and
Regulatory.    Mr.  Gale  has  previously  held  positions   with
MidAmerican  Energy  as  Vice  President  -  Regulatory  Law  and
Analysis  and Vice President - Law & Regulation.  Prior to  1995,
Mr.  Gale  was  Vice President - General Counsel of Iowa-Illinois
Gas and Electric Company, a predecessor of MidAmerican Energy.

      JAMES  J.  HOWARD,  56 Vice President, Regulatory  Affairs,
MidAmerican Energy Company.  Mr. Howard has been Vice  President,
Regulatory  Affairs since April, 1998.  Previously  he  had  been
Vice President, Administrative Services since 1989.

       DAVID   J.  LEVY,  44,  Senior  Vice  President,   Retail,
MidAmerican  Energy  Company.  Mr. Levy has  held  this  position
since  November 1, 1996, and Vice President from 1995 to November
1,  1996  and was a Vice President of Iowa-Illinois from 1993  to
1995.

      J.  SUE  ROZEMA,  46,  Vice President, Financial  Services,
MidAmerican Energy Company.  Ms. Rozema has been Vice  President,
Financial Services of MidAmerican Energy since March, 1998,  Vice
President and Treasurer from July, 1996 to March, 1998, and  Vice
President,  Investor  Relations from July, 1995  to  July,  1996.
Prior  to  that she was Vice President and Treasurer  of  Midwest
Resources, a predecessor company.

       LARRY   M.  SMITH,  43,  Vice  President  and  Controller,
MidAmerican  Energy  Company.  Mr. Smith has held  this  position
since  November  1996.   Prior  to  that  he  was  Controller  of
MidAmerican Energy or one of it predecessors since 1990.

      STEVEN R. WEISS, 44, Assistant General Counsel.  Mr.  Weiss
has  been  with MidAmerican Energy and its predecessor  companies
since   1987   providing  support  to  both  the  regulated   and
competitive  sides  of  the business.  He was  appointed  to  his
current  position  in  March 1999.  Prior to joining  MidAmerican
Energy  he served as a Hearing Examiner for the Illinois Commerce
Commission from 1982 until 1987.

      BEVERLY  A.  WHARTON,  45,  Senior  Vice  President,  State
Government  Affairs and Regulation, MidAmerican  Energy  Company.
Ms.  Wharton  has  held this position since  November  1996,  and
President,  Gas Division from 1995 to October 31,  1996  and  was
Group  Vice President of Midwest from 1992 to 1995.  Director  of
The Security National Bank of Sioux City.

      IAN  S.  R.  COLQUHOUN,  49,  Managing  Director,  Northern
Metering Services.  Mr. Colquhoun has spent more than 20 years in
Northern Electric with 14 years in management including two years
as  a  Personnel  and  Training  Manager  prior  to  his  current
appointment.  Mr. Colquhoun was appointed to his present post  in
November 1998.

      ERIC  CONNOR, 50, Director, Northern Electric and  Managing
Director, Utility Services. Mr. Connor joined Northern in 1992 as
a  Director. Prior to joining Northern, he was a Director at  NEI
<PAGE>
Reyrolle  Ltd.  and  prior  to that, his  appointments  included:
deputy  group  head of engineering, National Nuclear Corporation;
manager  computer systems, NEI Electronics (C&I Systems); systems
engineer, Davy-Leowy; software engineer, Marconi Space & Defence.

      DAVE  CROMPTON,  45, Managing Director,  Northern  Electric
Retail.   Mr. Crompton joined Northern Electric Retail  in  April
1990  where  he served as Sales Director, and earlier  this  year
also  took  over  the  Marketing function.   He  became  Managing
Director in June 1997.  During his time with Northern Electric he
has   gained  a  Master  in  Business  Administration  at  Durham
University.   Mr. Crompton has 26 years experience in  electrical
retailing of which 19 years were with Dixons/Currys where he held
the  posts  of  Regional Sales Manager and  Divisional  Marketing
Manager.

      MALCOLM  CHANDLER,  56,  Director,  Northern  Electric  and
Managing Director, Supply. Mr. Chandler joined Northern  in  1970
from  Manweb  as Tariffs Engineer. His management positions  have
included  Tariffs  &  Supplies  Manager,  Regional  Manager   and
Director of Tariffs & Contracts.

     ALAN  DICKSON,  50,  Tax  Manager,  Northern  Electric.  Mr.
Dickson  joined Northern in September 1989.  Prior  to  that  Mr.
Dickson  served in various posts with the Inland Revenue  and  as
District Inspector, Hexham.

      DAVID  A.  FAULKNER, 51, Director, Personnel and  Corporate
Affairs,  Northern Electric. Mr. Faulkner's management  positions
with  the  Company  have included Industrial  Relations  Manager,
Privatization Manager and Director of Corporate Affairs, to which
he added responsibility for Personnel and Training in 1994.

      DR.  JOHN  M. FRANCE, 41, Director of Regulation,  Northern
Electric. Mr. France joined Northern in 1989. From 1982 to  1989,
Mr.  France  held a number of regulatory positions  with  British
Gas.

      G. VALERIE GILES, 47, Company Secretary, Northern Electric.
Ms. Giles joined Northern Electric in 1989. From 1987 to 1989 she
was Assistant Company Secretary at Amersham International plc and
worked in their legal department from 1974 to 1987.

      DR.  PHILIP  S. LAWLESS, 37, Managing Director, Generation,
Northern  Electric.  Mr.  Lawless  joined  Northern  in  1989  as
Contract  Development  Officer  (Power  Purchase).  His  previous
positions  in  Northern  include Project  Manager-Teesside  Power
Limited   and  Generation  Projects  Manager.  Prior  to  joining
Northern,  he  worked at NEI Parsons Ltd, where he  held  various
positions,  and  North  Kalgurlie Mines  Ltd,  Australia,  as  an
Assistant Plant Metallurgist.

      KEN LINGE, 49, Director of Finance, Northern Electric.  Mr.
Linge  joined Northern as an accountancy trainee in 1968. He  has
held  a variety of finance posts. In charge of Financial Planning
since  1987,  he  has been involved in privatization,  regulatory
reviews and financial and treasury functions.

      DAVID  PEARSON, 44, Managing Director, Marketing and Sales,
Northern  Electric.  Mr.  Pearson  joined  Northern  in  1992  as
Managing  Director,  Retail.  Prior  to  that  his  directorships
included  Midlands Electricity, Sodexho, Thorn EMI, and  Moulinex
UK.  He  also  held  management positions at  General  Foods  and
Gilette.

      STEVE  RAINE, 52, Director, Information Systems Technology,
Northern Electric.  Mr. Raine's appointments have included:  Head
of Computer Services for North Yorkshire County Council; Director
of  IT  at  Northern; General Manager and Executive  Director  of
Northern  Information Systems (NIS). He currently represents  the
UK  electricity  industry  in UNIPEDE (the  European  electricity
utility  forum)  on  IT  matters  and  is  a  member  of  the  UK
Electricity Pool Programme Board responsible for delivery of  the
new trading systems for the opening up of the electricity market.

     JAMES D. STALLMEYER, 41, Vice President and General Counsel,
Northern  Electric.  Mr. Stallmeyer joined the Company  in  1993.
<PAGE>
Mr.  Stallmeyer practiced in the public finance and banking areas
at  Chapman  and Cutler in Chicago from 1984 to 1987 and  in  the
corporate  finance department from 1989 to 1993. Prior  to  that,
Mr.  Stallmeyer was an attorney in the public finance  department
of  the Chicago office of Skadden, Arps, Slate, Meagher & Flom in
1987  and  1988  and  was  a  legal  writing  instructor  at  the
University of Illinois College of Law in 1988 and 1989.

      DAVID  SWAN,  54, Director, Northern Electric and  Managing
Director, Distribution. Mr. Swan joined Northern in 1966 and  has
held   posts   in  varying  disciplines  including  distribution,
engineering  design, operations, customers engineering,  customer
relationships,   engineering  contracting,  logistics,   computer
systems development and project management.

     DAVID  A.  WATERS,  56, Managing Director, Northern  Utility
Services.   Mr.  Waters joined Northern in September  1960  as  a
Student  Apprentice. In 1982 he became a Resources  Engineer  and
received   appointments   as   Cleveland   (Teesside)   Technical
Distribution   System  Planning  Manager,  Business   Development
Manager, later promoted to Business Services Manager and  General
Manager,  NUSL.   The following March 1998 he  was  appointed  as
Managing Director.

      PETER  YOUNGS,  44, Managing Director, Gas Exploration  and
Development. Mr. Youngs joined Neste Oy in 1974 as a Geoscientist
and   held   the   following  positions   within   the   company:
International Exploration Manager, General Manager (Europe-Africa
Region), Vice President and Managing Director UKEXPRO. From  1994
to present, he has been the General Manager of CalEnergy Gas (UK)
Limited.
<PAGE>
                             PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports  on
Form 8-K

          (a)  Financial Statements and Schedules

          1.   Financial Statements

                Filed herewith and incorporated by reference  are
the  consolidated balance sheets of the Company and  subsidiaries
as of December 31, 1998 and 1997, and the consolidated statements
of  operations, cash flows and stockholders' equity for the years
ended December 31, 1998, 1997 and 1996, and the related report of
independent auditors.

          2.   Financial Statement Schedules

                 Independent  Auditor's  Report  on  Schedule  I,
Financial Statements of the Company (Parent Company only)

     (b)  Reports on Form 8-K

          The  Company filed a joint Current Report on  Form  8-K
dated  October 13, 1998 with MidAmerican Energy Holdings  Company
reporting   the   waiting  period  under  the   Hart-Scott-Rodino
Antitrust  Improvement Act of 1976 expired and federal  antitrust
clearance had been obtained for the proposed merger.

           The  Company filed a joint Current Report on Form  8-K
dated  October 30, 1998 with MidAmerican Energy Holdings  Company
reporting  that  in separate meetings held on  October  30,  1998
shareholders approved the proposed merger of the companies.

           The  Company filed a Current Report on Form 8-K  dated
November 10, 1998 reporting the pricing of its offering  of  $100
million aggregate principal amount of its 7.52% Senior Notes  due
2008.

           The  Company filed a Current Report on Form 8-K  dated
November 13, 1998 reporting the closing of its offering  of  $100
million aggregate principal amount of its 7.52% Series Notes  due
2008.

           The  Company filed a Current Report on Form 8-K  dated
November 30, 1998 reporting the amendment to its existing  Rights
Agreement dated as of December 1, 1988

           The  Company filed a Current Report on Form 8-K  dated
December  15, 1998 reporting the redemption on January  15,  1999
all of its outstanding 10 1/4% Senior Discount Notes due 2004.

           The  Company filed a joint Current Report on Form  8-K
dated  December 16, 1998 with MidAmerican Energy Holdings Company
reporting FERC issuing an order approving the planned merger  and
an order requiring 50% divestiture of CE's various QF's.

     (c)  Exhibits

           The  exhibits listed on the accompanying Exhibit Index
(except  in  the  case of Exhibit 13.0, in which  case  only  the
portion  of  the  Annual Report which constitutes  the  Company's
Consolidated Financial Statements and notes thereto) are filed as
part of this Annual Report.

           For  the purposes of complying with the amendments  to
the  rules  governing Form S-8 effective July 13, 1990 under  the
<PAGE>
Securities  Act  of  1933,  the  undersigned  Registrant   hereby
undertakes as follows, which undertaking shall be incorporated by
reference  into  the  Company's currently effective  Registration
Statements on Form S-8:

           Insofar  as  indemnification for  liabilities  arising
under  the  Securities Act of 1933 may be permitted to directors,
officers   and   controlling  persons  of  the  registrant,   the
registrant has been advised that in the opinion of the Securities
and  Exchange  Commission such indemnification is against  public
policy  as  expressed  in the Securities  Act  of  1933  and  is,
therefore,  unenforceable.  In  the  event  that  a   claim   for
indemnification against such liabilities (other than the  payment
by  the  registrant of expenses incurred or paid by  a  director,
officer or controlling person or the registrant in the successful
defense  of any action, suit or proceeding) is asserted  by  such
director,  officer or controlling person in connection  with  the
securities being registered, the registrant will, unless  in  the
opinion of its counsel the matter has been settled by controlling
precedent,  submit  to  a court of appropriate  jurisdiction  the
question of whether such indemnification by it is against  public
policy as expressed in the Act and will be governed by the  final
adjudication of such issue.

     (d)  Financial statements required by Regulations S-X, which
are excluded from the Annual Report by Rule 14a-3(b).

     Not applicable.

<PAGE>                                
                           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,  in the  City  of  Omaha,  State  of
Nebraska, on this 30th day of March, 1999.

                         MIDAMERICAN ENERGY HOLDINGS COMPANY


                               /s/ David L. Sokol*
                              By   David L. Sokol
                                   Chairman  of  the  Board  and Chief
                                   Executive Officer

                                   *By:  /s/  Steven A. McArthur
                                        Steven A. McArthur
                                        Attorney-in-Fact

      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.

        Signature                                         Date

/s/   David L. Sokol*                                   March 30,1999
David L. Sokol
Chairman of the Board,
Chief Executive Officer, and
Director


/s/   Gregory E. Abel*                                  March 30,1999
Gregory E. Abel
President and Chief Operating Officer


/s/  Alan L. Wells*                                     March 30, 1999
Alan L. Wells
Senior Vice President and
Chief Financial Officer


/s/   Patrick J. Goodman*                               March 30,1999
Patrick J. Goodman
Senior Vice President and
Chief Accounting Officer


/s/ Edgar D. Aronson*                                   March 30, 1999
Edgar D. Aronson
Director

*By:/s/  Steven A. McArthur                             March 30,1999
     Steven A. McArthur
     Attorney-in-Fact
<PAGE>
/s/      Judith E. Ayres*                               March 30,1999
Judith E. Ayres
Director

_______________________                                 March 30, 1999
Terry E. Branstad
Director

_______________________                                 March 30, 1999
Stanley J. Bright
Director

_______________________                                 March 30, 1999
Jack W. Eugster
Director

/s/     Richard R. Jaros*                               March 30, 1999
Richard R. Jaros
Director

/s/     David R. Morris*                                March 30,1999
David Morris
Director

_______________________                                 March 30, 1999
Robert L. Peterson
Director

/s/      John R. Shiner*                                March 30,1999
John R. Shiner
Director

/s/      Bernard W. Reznicek*                           March 30,1999
Bernard W. Reznicek
Director

/s/     Walter Scott, Jr.*                              March 30, 1999
Walter Scott, Jr.
Director


/s/      David E. Wit*                                  March 30,1999
David E. Wit
Director


*By:/s/  Steven A. McArthur                            March  30,1999
     Steven A. McArthur
     Attorney-in-Fact
<PAGE>
                          EXHIBIT INDEX

3.1  Amended  and  Restated  Articles  of  Incorporation  of  the
     Company  (incorporated  by reference  to  Annex  VI  to  the
     Company's Joint Proxy Statement, dated September 25, 1998).

3.2  * Articles of Merger of Maverick Reincorporation Sub, Inc. and
     CalEnergy Company, Inc. effective as of March 12, 1999.

3.3  * Articles  of Amendment to the Amended and Restated  Articles
     of  Incorporation  of  Maverick Reincorporation  Sub,  Inc.,
     effective  as of March 12, 1999 (name change to  MidAmerican
     Energy Holdings Company).

3.4  * Articles  of Amendment to the Amended and Restated  Articles
     of  Incorporation of the Company dated as of March 12,  1999
     (preferred stock rights).

3.5  The Company's Amended and Restated By-Laws (incorporated  by
     reference  to Exhibit 4.3 of the Company's Form  S-8,  dated
     March 19, 1999, Registration No. 333-74691).

4.1  Specimen   copy   of   form  of  Common  Stock   Certificate
     (incorporated  by reference to Exhibit 4.1 to the  Company's
     Form S-8, dated March 19, 1999, Registration No. 333-74691).

4.2  Shareholders  Rights  Agreement  between  the  Company   and
     Manufacturers  Hanover  Trust Company  of  California  dated
     March  12, 1999 (incorporated by reference to Exhibit 1  to
     the Company's Form 8-A, dated as of March 12, 1999, File No.
     1-14881).

4.3  Indenture  for  the  6 1/4% Convertible Junior  Subordinated
     Debentures,  dated  as  of April 1,  1996,  among  CalEnergy
     Company,  Inc.,  as Issuer, and the Bank  of  New  York,  as
     Trustee  (incorporated  by  reference  to  Exhibit  4.3   to
     Amendment 1 to the Company's Registration Statement on  Form
     S-3, Registration No. 333-08315).

4.4  Indenture,  dated  as  of September 20,  1996,  between  the
     Company  and IBJ Schroder Bank & Trust Company, as  trustee,
     relating  to $225,000,000 principal amount of 9 1/2%  Senior
     Notes due 2006 (incorporated by reference to Exhibit 4.1  to
     the   Company's   Registration  Statement   on   Form   S-3,
     Registration No. 333-15591).

4.5  Indenture  for  the  6 1/4% Convertible Junior  Subordinated
     Debentures due 2012, dated as of February 26, 1997,  between
     the Company, as issuer, and the Bank of New York, as Trustee
     (incorporated  by  reference  to  Exhibit  10.129   to   the
     Company's 1996 Form 10-K).

4.6  Registration Rights Agreement, dated August 12, 1997, by and
     among  CalEnergy Capital Trust III, CalEnergy Company, Inc.,
     Credit  Suisse First Boston Corporation and Lehman Brothers,
     Inc.   (incorporated  by  reference  Exhibit  10.1  to   the
     Company's Registration Statement and on Form S-3,  No.  333-
     45615).

4.7  Indenture,  dated as of October 15, 1997, among the  Company
     and   IBJ   Schroder  Bank  &  Trust  Company,  as   Trustee
     (incorporated  by reference to Exhibit 4.1 to the  Company's
     Current Report on Form 8-K dated October 23, 1997).

4.8  Form  of  First Supplemental Indenture, dated as of  October
     28,  1997, among the Company and IBJ Schroder Bank  &  Trust
     Company,  as Trustee (incorporated by reference  to  Exhibit
     4.2  to  the  Company's Current Report  on  Form  8-K  dated
     October 23, 1997).

4.9  Form of Second Supplemental Indenture, dated as of September
     22,  1998 between the Company and IBJ Schroder Bank &  Trust
     Company, as Trustee (incorporated by reference to Exhibit 4.1 to
     the Company's Current Report on Form 8-K dated September 17,
     1998.)
<PAGE>
4.10 Form  of  Third Supplemental Indenture, dated as of November
     13,  1998, between the Company and IBJ Schroder Bank & Trust
     Company, as Trustee (incorporated by reference to the Company's
     Current Report on Form 8-K dated November 10, 1998).

10.1 1996 Employee Stock Option Plan, as amended (incorporated by
     reference   to  Exhibit  A  to  the  Company's  1996   Proxy
     Statement, 1997 Proxy Statement and 1998 Proxy Statement).

10.2 1994  Employee Stock Purchase Plan, as amended (incorporated
     by  reference  to  Exhibit  A to the  Company's  1994  Proxy
     Statement).

10.3 Amended  and  Restated  Employment  Agreement  between   the
     Company  and  David  L. Sokol dated as of  August  21,  1995
     (incorporated by reference to Exhibit 10.82 to the Company's 1995
     Form  10-K);  Amendment No. 1 to the  Amended  and  Restated
     Employment Agreement between the Company and David L. Sokol,
     dated August 28, 1996 (incorporated by reference to Exhibit 10.43
     to the Company's 1996 Form 10-K), and Amendment No. 2 to the
     Amended and Restated Employment Agreement between the Company and
     David L. Sokol dated April 16, 1997 (incorporated by reference to
     Exhibit 10.32 to the Company's 1997 Form 10-K).

10.4 *  Restricted Stock Exchange Agreement between the Company  and
     David L. Sokol dated as of November 29, 1995 (incorporated by
     reference to Exhibit 10.43 to the Company's 1995 Form 10-K),
     Amendment  No. 1 to the Restricted Stock Exchange  Agreement
     between the Company and David L. Sokol dated August 28, 1996 and
     Amendment No. 2 dated April 16, 1997.

10.5 Employment  Agreement  between the Company  and  Gregory  E.
     Abel,  dated  August 6, 1996 (incorporated by  reference  to
     Exhibit 10.44 to the Company's 1996 Form 10-K).

10.6 Amendment  No.  1  to the Employment Agreement  between  the
     Company   and   Gregory  E.  Abel  dated  April   16,   1997
     (incorporated by reference to Exhibit 10.34 to the Company's
     1997 Form 10-K).

10.7 Employment  Agreement  between the  Company  and  Steven  A.
     McArthur, dated August 6, 1996 (incorporated by reference to
     Exhibit 10.46 to the Company's 1996 Form 10-K).

10.8 Amendment  No.  1  to the Employment Agreement  between  the
     Company  and  Steven  A.  McArthur  dated  April  16,   1997
     (incorporated by reference to Exhibit 10.38 to the Company's
     1997 Form 10-K).

10.9 125  MW  Power  Plant - Upper Mahiao Agreement  (the  "Upper
     Mahiao  ECA")  dated  September 6, 1993 between  PNOC-Energy
     Development  Corporation ("PNOC-EDC")  and  Ormat,  Inc.  as
     amended  by the First Amendment to 125 MW Power Plant  Upper
     Mahiao  Agreement dated as of January 28, 1994,  the  Letter
     Agreement  dated  February 10, 1994,  the  Letter  Agreement
     dated  February 18, 1994 and the Fourth Amendment to 125  MW
     Power  Plant - Upper Mahiao Agreement dated as of  March  7,
     1994  (incorporated  by reference to Exhibit  10.95  to  the
     Company's 1994 Form 10-K).

10.10      Credit  Agreement dated April 8, 1994  among  CE  Cebu
     Geothermal  Power Company, Inc., the Banks  thereto,  Credit
     Suisse as Agent (incorporated by reference to Exhibit  10.96
     to the Company's 1994 Form 10-K).

10.11      Credit Agreement dated as of April 8, 1994 between  CE
     Cebu  Geothermal Power Company, Inc., Export-Import Bank  of
     the  United  States  (incorporated by reference  to  Exhibit
     10.97 to the Company's 1994 Form 10-K).
<PAGE>
10.12      Pledge  Agreement among CE Philippines Ltd, Ormat-Cebu
     Ltd.,  Credit  Suisse  as  Collateral  Agent  and  CE   Cebu
     Geothermal  Power Company, Inc. dated as of  April  8,  1994
     (incorporated by reference to Exhibit 10.98 to the Company's
     1994 Form 10-K).

10.13      Overseas  Private Investment Corporation  Contract  of
     Insurance  dated April 8, 1994 between the Overseas  Private
     Investment Corporation ("OPIC") and the Company through  its
     subsidiaries CE International Ltd., CE Philippines Ltd., and
     Ormat-Cebu Ltd. (incorporated by reference to Exhibit  10.99
     to the Company's 1994 Form 10-K).

10.14       180   MW   Power   Plant   -  Mahanagdong   Agreement
     ("Mahanagdong  ECA") dated September 18, 1993 between  PNOC-
     EDC  and CE Philippines Ltd. and the Company, as amended  by
     the  First Amendment to Mahanagdong ECA dated June 22, 1994,
     the  Letter  Agreement  dated  July  12,  1994,  the  Letter
     Agreement  dated July 29, 1994, and the Fourth Amendment  to
     Mahanagdong  ECA  dated  March  3,  1995  (incorporated   by
     reference to Exhibit 10.100 to the Company's 1994  Form  10-
     K).

10.15      Credit  Agreement dated as of June 30, 1994  among  CE
     Luzon  Geothermal  Power  Company,  Inc.,  American  Pacific
     Finance  Company,  the Lenders party thereto,  and  Bank  of
     America   National   Trust   and  Savings   Association   as
     Administrative Agent (incorporated by reference  to  Exhibit
     10.101 to the Company's 1994 Form 10-K).

10.16      Credit Agreement dated as of June 30, 1994 between  CE
     Luzon Geothermal Power Company, Inc. and Export-Import  Bank
     of  the  United States (incorporated by reference to Exhibit
     10.102 to the Company's 1994 Form 10-K).

10.17      Finance Agreement dated as of June 30, 1994 between CE
     Luzon  Geothermal  Power Company, Inc. and Overseas  Private
     Investment Corporation (incorporated by reference to Exhibit
     10.103 to the Company's 1994 Form 10-K).

10.18      Pledge  Agreement dated as of June 30, 1994  among  CE
     Mahanagdong  Ltd.,  Kiewit  Energy  International  (Bermuda)
     Ltd., Bank of America National Trust and Savings Association
     as  Collateral Agent and CE Luzon Geothermal Power  Company,
     Inc.  (incorporated by reference to Exhibit  10.104  to  the
     Company's 1994 Form 10-K).

10.19      Overseas  Private Investment Corporation  Contract  of
     Insurance dated July 29, 1994 between OPIC and the  Company,
     CE  International  Ltd., CE Mahanagdong  Ltd.  and  American
     Pacific Finance Company and Amendment No. 1 dated August  3,
     1994  (incorporated by reference to Exhibit  10.105  to  the
     Company's 1994 Form 10-K).

10.20      231  MW  Power  Plant - Malitbog Agreement  ("Malitbog
     ECA")  dated September 10, 1993 between PNOC-EDC  and  Magma
     Power  Company  and the First and Second Amendments  thereto
     dated  December  8,  1993 and March 10,  1994,  respectively
     (incorporated  by  reference  to  Exhibit  10.106   to   the
     Company's 1994 Form 10-K).

10.21      Credit  Agreement dated as of November 10, 1994  among
     Visayas Power Capital Corporation, the Banks parties thereto
     and  Credit Suisse Bank Agent (incorporated by reference  to
     Exhibit 10.107 to the Company's 1994 Form 10-K).

10.22     Finance Agreement dated as of November 10, 1994 between
     Visayas   Geothermal  Power  Company  and  Overseas  Private
     Investment Corporation (incorporated by reference to Exhibit
     10.108 to the Company's 1994 Form 10-K).

10.23      Pledge and Security Agreement dated as of November 10,
     1994 among Broad Street Contract Services, Inc., Magma Power
     Company,  Magma Netherlands B.V. and Credit Suisse  as  Bank
     Agent  (incorporated by reference to Exhibit 10.109  to  the
     Company's 1994 Form 10-K).
<PAGE>
10.24      Overseas  Private Investment Corporation  Contract  of
     Insurance  dated December 21, 1994 between  OPIC  and  Magma
     Netherlands,  B.V.  (incorporated by  reference  to  Exhibit
     10.110 to the Company's 1994 Form 10-K).

10.25       Agreement   as  to  Certain  Common  Representations,
     Warranties,  Covenants and Other Terms, dated  November  10,
     1994 between Visayas Geothermal Power Company, Visayas Power
     Capital Corporation, Credit Suisse, as Bank Agent, OPIC  and
     the  Banks  named  therein  (incorporated  by  reference  to
     Exhibit 10.111 to the Company's 1994 Form 10-K).

10.26      Trust  Indenture dated as of November 27, 1995 between
     the   CE  Casecnan  Water  and  Energy  Company,  Inc.  ("CE
     Casecnan")   and  Chemical  Trust  Company   of   California
     (incorporated  by reference to Exhibit 4.1 to CE  Casecnan's
     Registration  Statement on Form S-4 dated January  25,  1996
     ("Casecnan S-4")).

10.27     Amended and Restated Casecnan Project Agreement between
     the National Irrigation Administration and CE Casecnan Water
     and Energy Company Inc. dated June 26, 1995 (incorporated by
     reference to Exhibit 10.1 to the Casecnan Form S-4).

10.28     Term Loan and Revolving Facility Agreement, dated as of
     October 28, 1996, among CE Electric UK Holdings, CE Electric
     UK  plc  and  Credit Suisse (incorporated  by  reference  to
     Exhibit 10.130 to the Company's 1996 Form 10-K).

10.29      Public  Electricity  Supply License  (incorporated  by
     reference to Exhibit 10.131 to the Company's 1996 Form 10-K)

10.30      Second Tier Supply Licenses to Supply Electricity  for
     England  & Wales and Scotland (incorporated by reference  to
     Exhibit 10.132 to the Company's 1996 Form 10-K).

10.31      Pooling  and Settlement Agreement for the  Electricity
     Industry  in  England and Wales dated 30th March,  1990  (as
     amended at 17th October, 1996), among The Generators  (named
     therein),  the Suppliers (named therein), Energy Settlements
     and  Information  Services  Limited  (as  Settlement  System
     Administrator), Energy Pool Funds Administration Limited (as
     Pool  Funds  Administrator), Scottish Power plc, Electricite
     deFrance,  Service  National  and  Others  (incorporated  by
     reference to Exhibit 10.133 to the Company's 1996  Form  10-
     K).

10.32      Master  Connection and User System Agreement with  The
     National  Grid  Company plc (incorporated  by  reference  to
     Exhibit 10.134 to the Company's 1996 Form 10-K).

10.33       Gas   Suppliers  License  dated  February  21,   1996
     (incorporated  by  reference  to  Exhibit  10.135   to   the
     Company's 1996 Form 10-K).

10.34     Acquisition Agreement by and between CalEnergy Company,
     Inc. and Kiewit Diversified Group Inc. dated as of September
     10,  1997  (incorporated by reference to Exhibit  2  to  the
     Company's  Current  Report on Form 8-K dated  September  11,
     1997).

10.35     Agreement and Plan of Merger dated as of August 11, 1998 by
     and among CalEnergy Company, Inc., Maverick Reincorporation Sub,
     Inc., MidAmerican Energy Holdings Company and MAVH Inc.
     (incorporated by reference to the Company's Current Report on
     Form 8-K dated August 11, 1998).

10.36 *   Indenture and First Supplemental Indenture, dated March 11,
     1999, between MidAmerican Funding LLC and IBJ Whitehall Bank &
     Trust Company and the First Supplement thereto relating to the
     $700 million Senior Notes and Bonds.
<PAGE>
10.37 *   Settlement Agreement by and between MidAmerican Energy
     Company, the Iowa Utilities Board, the Iowa Office of Consumer
     Advocate, and others.

10.38      General Mortgage Indenture and Deed of Trust dated  as
     of  January 1, 1993, between Midwest Power Systems Inc.  and
     Morgan  Guaranty Trust Company of New York, Trustee.  (Filed
     as  Exhibit 4(b)-1 to Midwest Resources Inc.'s Annual Report
     on   Form  10-K  for  the  year  ended  December  31,  1992,
     Commission File No. 1-10654.)

10.39      First  Supplemental Indenture dated as of  January  1,
     1993, between Midwest Power Systems Inc. and Morgan Guaranty
     Trust Company of New York, Trustee.  (Filed as Exhibit 4(b)-
     2  to Midwest Resources' Annual Report on Form 10-K for  the
     year ended December 31, 1992, Commission File No. 1-10654.)

10.40      Second Supplemental Indenture dated as of January  15,
     1993, between Midwest Power Systems Inc. and Morgan Guaranty
     Trust Company of New York, Trustee.  (Filed as Exhibit 4(b)-
     3  to Midwest Resources' Annual Report on Form 10-K for  the
     year ended December 31, 1992, Commission File No. 1-10654.)

10.41      Third Supplemental Indenture dated as of May 1,  1993,
     between Midwest Power Systems Inc. and Morgan Guaranty Trust
     Company  of  New  York, Trustee.  (Filed as Exhibit  4.4  to
     Midwest  Resources' Annual Report on Form 10-K for the  year
     ended December 31, 1993, Commission File No. 1-10654.)

10.42      Fourth  Supplemental Indenture dated as of October  1,
     1994,  between Midwest Power Systems Inc. and  Harris  Trust
     and Savings Bank, Trustee.  (Filed as Exhibit 4.5 to Midwest
     Resources'  Annual Report on Form 10-K for  the  year  ended
     December 31, 1994, Commission File No. 1-10654.)

10.43      Fifth  Supplemental Indenture dated as of November  1,
     1994,  between Midwest Power Systems Inc. and  Harris  Trust
     and Savings Bank, Trustee.  (Filed as Exhibit 4.6 to Midwest
     Resources'  Annual Report on Form 10-K for  the  year  ended
     December 31, 1994, Commission File No. 1-10654.)

10.44      Indenture of Mortgage and Deed of Trust, dated  as  of
     March  1,  1947.  (Filed by Iowa-Illinois Gas  and  Electric
     Company  ("Iowa-Illinois") as Exhibit 7B to Commission  File
     No. 2-6922.)

10.45      Sixth Supplemental Indenture dated as of July 1, 1967.
     (Filed  by Iowa-Illinois as Exhibit 2.08 to Commission  File
     No. 2-28806.)

10.46      Twentieth Supplemental Indenture dated as  of  May  1,
     1982.   (Filed as Exhibit 4.B.23 to Iowa-Illinois' Quarterly
     Report  on  Form  10-Q for the period ended June  30,  1982,
     Commission File No.
     1-3573.)

10.47      Resignation  and  Appointment of successor  Individual
     Trustee.   (Filed  by  Iowa-Illinois as  Exhibit  4.B.30  to
     Commission File No. 33-39211.)

10.48      Twenty-Eighth Supplemental Indenture dated as  of  May
     15,  1992.   (Filed  as  Exhibit  4.31.B  to  Iowa-Illinois'
     Current  Report  on Form 8-K dated May 21, 1992,  Commission
     File No. 1-3573.)

10.49      Twenty-Ninth Supplemental Indenture dated as of  March
     15,  1993.   (Filed  as  Exhibit  4.32.A  to  Iowa-Illinois'
     Current  Report on Form 8-K dated March 24, 1993, Commission
     File No. 1-3573.)

10.50     Thirtieth Supplemental Indenture dated as of October 1,
     1993.   (Filed  as Exhibit 4.34.A to Iowa-Illinois'  Current
     Report  on  Form 8-K dated October 7, 1993, Commission  File
     No. 1-3573.)
<PAGE>
10.51      Sixth Supplemental Indenture dated as of July 1, 1995,
     between Midwest Power Systems Inc. and Harris Trust and Savings
     Bank, Trustee.  (Filed as Exhibit 4.15 to MidAmerican Energy
     Company's ("MidAmerican Energy") Annual Report on Form 10-K dated
     December 31, 1995, Commission File No. 1-11505.)

10.52     Thirty-First Supplemental Indenture dated as of July 1,
     1995,  between  Iowa-Illinois Gas and Electric  Company  and
     Harris  Trust and Savings Bank, Trustee.  (Filed as  Exhibit
     4.16  to  MidAmerican Energy's  Annual Report on  Form  10-K
     dated December 31, 1995, Commission File No. 1-11505.)
     
10.53      Power  Sales  Contract between  Iowa  Power  Inc.  and
     Nebraska Public Power District, dated September 22, 1967.  (Filed
     as  Exhibit  4-C-2  to Iowa Power Inc.'s (IPR)  Registration
     Statement, Registration No. 2-27681).

10.54     Amendments Nos. 1 and 2 to Power Sales Contract between
     Iowa Power Inc. and Nebraska Public Power District.  (Filed as
     Exhibit 4-C-2a to IPR's Registration Statement, Registration No.
     2-35624.)

10.55      Amendment  No. 3 dated August 31, 1970, to  the  Power
     Sales Contract between Iowa Power Inc. and Nebraska Public Power
     District, dated September 22, 1967.  (Filed as Exhibit 5-C-2-b to
     IPR's Registration Statement, Registration No. 2-42191.)

10.56      Amendment  No. 4 dated March 28, 1974,  to  the  Power
     Sales Contract between Iowa Power Inc. and Nebraska Public Power
     District, dated September 22, 1967.  (Filed as Exhibit 5-C-2-c to
     IPR's Registration Statement, Registration No. 2-51540.)

10.57      Amendment No. 5 dated September 2, 1997, to the  Power
     Sales Contract between MidAmerican Energy Company and Nebraska
     Public Power District, dated September 22, 1967.  (Filed  as
     Exhibit 10.2 to MidAmerican Energy's Quarterly Reports on the
     combined Form 10-Q for the quarter ended September 30, 1997,
     Commission File Nos. 1-12459 and 1-11505, respectively.)

10.58     MidAmerican Energy Company Severance Plan For Specified
     Officers dated November 1, 1996.  (Filed as Exhibit 10.1  to
     MidAmerican Energy's Annual Reports on the combined Form 10-K for
     the year ended December 31, 1996, Commission File Nos. 1-12459
     and 1-11505, respectively.)

10.59      MidAmerican Energy Company Deferred Compensation  Plan
     for Executives.  (Filed as Exhibit 10.2 to MidAmerican Energy's
     Annual Report on Form 10-K dated December 31, 1995, Commission
     File No. 1-11505.)

10.60     MidAmerican Energy Company Supplemental Retirement Plan
     for  Designated  Officers.  (Filed as      Exhibit  10.3  to
     MidAmerican Energy's Annual Report on Form 10-K dated December
     31, 1995, Commission File No. 1-11505.)

10.61      MidAmerican  Energy  Company Key  Employee  Short-Term
     Incentive Plan.  (Filed as Exhibit 10.4 to MidAmerican's Annual
     Report on Form 10-K dated December 31, 1995, Commission File No.
     1-11505.)

10.62      Deferred  Compensation Plan for Executives of  Midwest
     Resources Inc. and Subsidiaries.  (Filed as Exhibit 10.1  to
     Midwest Resources' Annual Report on Form 10-K for the year ended
     December 31, 1990, Commission File No. 1-10654).

10.63      Deferred  Compensation Plan for Board of Directors  of
     Midwest Resources Inc. and Subsidiaries. (Filed as Exhibit 10.2
     to Midwest Resources' Annual Report on Form 10-K for the year
     ended December 31, 1990, Commission File No. 1-10654).
<PAGE>
10.64      Midwest  Resources Inc. revised and amended  Executive
     Deferred  Compensation Plan for IOR and Subsidiaries,  dated
     January 29, 1992.  (Filed as Exhibit 10.5 to Midwest Resources'
     Annual Report on Form 10-K for the year ended December 31, 1991,
     Commission File No. 1-10654.)

10.65      Midwest  Resources Inc. revised and amended  Board  of
     Directors Deferred Compensation Plan for IOR and Subsidiaries,
     dated  January 29, 1992.  (Filed as Exhibit 10.6 to  Midwest
     Resources' Annual Report on Form 10-K for the year ended December
     31, 1991, Commission File No. 1-10654.)

10.66      Midwest  Resources Inc. Supplemental  Retirement  Plan
     (formerly the Midwest Energy Company Supplemental Retirement
     Plan).  (Filed as Exhibit 10.10 to Midwest Resources' Annual
     Report  on  Form 10-K for the year ended December 31,  1993,
     Commission File No. 1-10654.)

10.67      Revised  and  amended Executive Deferred  Compensation
     Plan for IPR and Subsidiaries, dated July 24, 1985.  (Filed as
     Exhibit 10.22 to IPR's Annual Report on Form 10-K for the year
     ended December 31, 1985, Commission File No. 1-7830.)

10.68      Revised  and  amended Deferred Compensation  Plan  for
     Board of Directors of IPR and Subsidiaries, dated July 24, 1985.
     (Filed as Exhibit 10.22 to IPR's Annual Report on Form 10-K for
     the year ended December 31, 1985, Commission File No. 1-7830.)

10.69      Revised  and  amended Executive Deferred  Compensation
     Plan for IPR and Subsidiaries, dated December 18, 1987.  (Filed
     as Exhibit 10.15 to IPR's Annual Report on Form 10-K for the year
     ended December 31, 1987, Commission File No. 1-7830.)

10.70      Revised  and  amended Deferred Compensation  Plan  for
     Board of Directors of IPR and Subsidiaries, dated December 18,
     1987.  (Filed as Exhibit 10.16 to IPR's Annual Report on Form 10-
     K for the year ended December 31, 1987, Commission File No. 1-
     7830.)

10.71      Amendments  to  Midwest Resources  Executive  Deferred
     Compensation Plans, dated October 30, 1992.  (Filed as Exhibit
     10(h) to Midwest Resource's Annual Report on Form 10-K for the
     year ended December 31, 1992, Commission File No. 1-10654.)

10.72     Supplemental Retirement Plan for Principal Officers, as
     amended as of July 1, 1993.  (Filed as Exhibit 10.K.2 to Iowa-
     Illinois' Annual Report on Form 10-K for the year ended December
     31, 1993, Commission  File No. 1-3573.)

10.73      Compensation Deferral Plan for Principal Officers,  as
     amended as of July 1, 1993.  (Filed as Exhibit 10.K.2 to Iowa-
     Illinois' Annual Report on Form 10-K for the year ended December
     31, 1993, Commission File No. 1-3573.)

10.74     Board of Directors' Compensation Deferral Plan.  (Filed
     as Exhibit 10.K.4 to Iowa-Illinois' Annual Report on Form 10-K
     for the year ended December 31, 1992, Commission File No. 1-
     3573.)

10.75       Amendment  No.  1  to  the  Midwest  Resources   Inc.
     Supplemental Retirement Plan.  (Filed as Exhibit 10.24 to Midwest
     Resources' Annual Report on Form 10-K for the year ended December
     31, 1994, Commission File No. 1-10654.)

10.76      Deferred  Compensation Plan of Midwest Energy  Company
     and Subsidiary Corporations.  (Filed as Exhibit 10.25 to Midwest
     Resources' Annual Report on Form 10-K for the year ended December
     31, 1994, Commission File No. 1-10654.)

10.77      MidAmerican  Energy  Company 1995 Long-Term  Incentive
     Plan.  (Filed as Exhibit 10(a) to MidAmerican Energy Holding
     Company's (now known as MHC, Inc.) Registration Statement on Form
     S-4, File No. 333-01645.)
<PAGE>
10.78      Amendment No. 5 dated September 2, 1997, to the  Power
     Sales contract between MidAmerican Energy Company and Nebraska
     Public Power District, dated September 22, 1967.  (Filed  as
     Exhibit 10.2 to MidAmerican Energy's Quarterly Reports on the
     combined Form 10-Q for the quarter ended September 30, 1997,
     Commission File Nos. 1-12459 and 1-11505, respectively.)

10.79      Amendment  No.  1  dated  October  29,  1997,  to  the
     MidAmerican Energy Company 1995 Long-Term Incentive Plan.  (Filed
     as Exhibit 10.1 to MidAmerican Energy's Quarterly Reports on the
     combined Form 10-Q for the quarter ended September 30, 1997,
     Commission File Nos. 1-12459 and 1-11505, respectively.)

13.0 The  Company's 1998 Annual Report (only the portions thereof
     specifically  incorporated herein by  reference  are  deemed
     filed herewith).

21.0  *  Subsidiaries of Registrant.

23.0 Consent of Independent Auditors.

24.0 Power of Attorney.

27.0 Financial Data Schedule.

*To be filed by amendment.
<PAGE>
MidAmerican Energy Holdings Company                            Schedule I
Parent Company Only
Condensed Balance Sheets
as of December 31, 1998 and 1997
(dollars and shares in thousands, except per share amounts)


                                                             1998       1997

ASSETS
Cash and cash equivalents                            $  1,522,294 $  1,280,477
Investments  in  and advances to subsidiaries 
 and joint  ventures                                    2,442,118    1,932,912
Equipment, net                                             17,554       19,016
Deferred charges and other assets                         155,332      105,223

 Total assets                                        $  4,137,298  $ 3,337,628

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and other accrued liabilities       $     98,940  $    46,964
Parent company debt                                     2,645,991    1,303,845
 Total liabilities                                      2,744,931    1,350,809

Deferred income                                            11,384       12,827
Company-obligated  mandatorily redeemable
  convertible  preferred securities of subsidiary trusts  553,930      553,930
Common stock and options subject to redemption                ---      654,736

Stockholders' equity:
  Preferred stock - authorized 2,000 shares, no par  value    ---          ---
 Common stock - par value $0.0675 per share,
   authorized 180,000 shares, issued 82,980 shares,
    outstanding  59,605 and 81,322 shares, respectively     5,602        5,602
 Additional paid in capital                             1,233,088    1,261,081
 Retained earnings                                        340,496      213,493
 Accumulated other comprehensive income                        45       (3,589)
   Common stock and options subject to redemption             ---     (654,736)
  Treasury  stock- 23,375 and 1,658 common shares 
   at cost                                               (752,178)     (56,525)
 Total stockholders' equity                               827,053      765,326
 Total liabilities and stockholders' equity            $4,137,298   $3,337,628


The  notes  to the consolidated MidAmerican financial  statements
are an integral part of these financial statements.

<PAGE>
MidAmerican Energy Holdings Company                 Schedule I
Parent Company Only                                (continued)
Condensed Statements Of Operations
for the three years ended December 31, 1998
(dollars in thousands)
                                                  1998      1997      1996

Revenue:

Equity in undistributed earnings of subsidiary 
  companies and joint ventures                 $ 205,049 $  79,905 $  85,535
Cash dividends and distributions from subsidiary
 companies and joint ventures                    179,782   156,686   102,428
Interest and other income                         44,686    49,488    22,459

 Total revenues                                  429,517   286,079   210,422

Expenses:

General and administration                        30,527    36,616    15,170
Interest, net of capitalized interest            132,250    75,438    56,279

 Total expenses                                  162,777   112,054    71,449

Income before provision for income taxes         266,740   174,025   138,973
Provision for income taxes                        93,265    99,044    41,821

Income before minority interest                  173,475    74,981    97,152
Minority    interest                              35,963    23,158     4,691

Income before extraordinary item and 
 cumulative  effect  of change
     in accounting principle                     137,512    51,823    92,461
Extraordinary item, net of tax                    (7,146) (135,850)      ---
Cumulative effect of change in accounting 
  principle, net  of tax                          (3,363)      ---       ---
Net income (loss) available to 
  common stockholders                          $ 127,003  $(84,027)  $92,461

Income per share before extraordinary item and cumulative
   effect of change in accounting principle    $    2.29  $    .77   $  1.69
Extraordinary item                            (      .12)    (2.02)      ---
Cumulative effect of change in accounting 
  principle                                        ( .06)      ---       ---
Net income (loss) per share                    $    2.11  $  (1.25) $   1.69

Income per share before extraordinary item 
  and cumulative effect of change in 
  accounting principle   -  diluted            $    2.15  $    .75  $   1 .54
Extraordinary item - diluted                       ( .10)    (1.97)       ---
Cumulative effect of change in accounting principle  
 -diluted                                          ( .04)      ---        ---
Net income (loss) per share - diluted          $    2.01   $  (1.22)$    1.54

Average number of shares outstanding              60,139     67,268    54,739
Diluted shares                                    74,100     68,686    65,072

The   notes   to  the  consolidated  MidAmerican   financial
statements   are   an  integral  part  of  these   financial
statements.
<PAGE>
MidAmerican Energy Holdings Company                    Schedule I
Parent Company Only                                    (continued)
Condensed Statements Of Cash Flows
for the three years ended December 31, 1998
(dollars in thousands)
                                                 1998      1997      1996


Cash flows from operating activities        $(219,705)  $(200,057)  $(38,961)

Cash flows from investing activities:
Decrease (increase) in advances to and 
 investments in subsidiaries and 
 joint ventures                              (103,494)    174,584   (524,647)
Decrease (increase) in short-term investments     421        (229)    33,998
Other                                         (24,749)     18,330     (5,179)

Cash flows from investing activities         (127,822)    192,685   (495,828)

Cash flows from financing activities:
Proceeds from sale of common and treasury stock and
  exercise of stock options                     3,412     703,624     54,935
Proceeds from issuance of parent 
  company debt                              1,502,243     350,000    324,150
Proceeds from convertible preferred securities
   of subsidiary trusts                           ---     450,000    103,930
Repayment of parent company debt             (167,285)   (100,000)       ---
Net proceeds from revolver                        ---     (95,000)    95,000
Purchase of treasury stock                   (724,791)    (55,505)   (12,008)
Deferred charges relating to debt financing   (24,235)    (33,719)    (8,811)

Cash flows from financing activities          589,344   1,219,400    557,196

Net increase in cash and cash equivalents     241,817   1,212,028     22,407

Cash and cash equivalents at beginning 
  of period                                 1,280,477      68,449     46,042

Cash and cash equivalents at end of period $1,522,294  $1,280,477  $  68,449

Supplemental disclosures:
Interest  paid  (net  of  amount  
  capitalized)                          $     104,350  $   38,176  $   1,705

Income taxes paid                       $      32,100  $   35,302  $  23,211


The   notes   to  the  consolidated  MidAmerican   financial
statements   are   an  integral  part  of  these   financial
statements.



<PAGE>






INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
MidAmerican Energy Holdings Company
Omaha, Nebraska


We  have  audited the consolidated financial  statements  of
MidAmerican  Energy  Holdings  Company,  the  successor   of
CalEnergy Company, Inc. and subsidiaries' as of December 31,
1998 and 1997, and for each of the three years in the period
ended  December 31, 1998, and have issued our report thereon
dated January 28, 1999 (March 12, 1999 as to Note 3 and Note
21);  such financial statements and reports are included  in
your 1998 Annual Report to Stockholders and are incorporated
herein by reference.  Our audits also included the financial
statement  schedule of MidAmerican Energy  Holdings  Company
and   subsidiaries,  listed  in  Item  14.   This  financial
statement  schedule is the responsibility of  the  Company's
management.   Our  responsibility is to express  an  opinion
based  on  our  audits.   In  our  opinion,  such  financial
statement schedule, when considered in relation to the basic
financial  statements taken as a whole, presents  fairly  in
all material respects the information set forth therein.



Deloitte & Touche, LLP
Omaha, Nebraska
January 28, 1999 (March 12, 1999 as to Note 3 and Note 21)