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**EXHIBIT        10.3**

**STIPULATION        AND AGREEMENT**

**Article        I **
**Introduction**

** **
* *
* *

|   | 1.     | The                  State of Iowa is encouraging more renewable energy be built in                  the state                  as set forth in Iowa Code Section 476.41(2005) and. Executive Order                  41                  which among other objectives promotes the use of a 10% renewable                  energy                  for state-owned facilities; |
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|   | 2.     | MidAmerican’s                  positive experience with existing wind projects (operationally                  and                  installation costs);                                                                                                                                                                                                                 |
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|   | 3.     | The                  2006-2007 Expansion Project has favorable economics to customers                  and                  MidAmerican.                                                                                                                                                                                                                                       |
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|   | 4.     | The                  need to further increase diversity as fuel costs (coal and natural                  gas)                  have become increasingly volatile;  |
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|   | 5*.*   | The                  current production tax credit ends January 1, 2008 and if it is                  extended                  will most likely be of less value. |

**Article        II - Purpose**

**Terms**
**:**

|   | **Topic**                                           | **Ratemaking                  Principle**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   | **Iowa                  Jurisdictional****portion** | The                  2006-2007 Expansion Project will be allocated to Iowa in the same                  manner                  as for the new generation (Greater Des Moines Energy Center, Council                  Bluffs Energy Center Unit 4, initial wind project and wind expansion                  project) specified in Dockets SPU-05-09 and SPU-05-12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   | **Cost                  Cap**                       | **Cost                  Cap.**                  The Iowa jurisdictional portion of MidAmerican’s prudently incurred                  capital costs, operation and maintenance expenses and other actual                  costs                  of the 2006- 2007 Expansion Project shall be included in MidAmerican’s                  regulated electric rates. MidAmerican shall be permitted to include                  in                  rates the actual costs, up to the Iowa jurisdictional portion of                  **[CONFIDENTIAL]**million                  per MW installed                  (inclusive of associated costs necessary for the reliable integration                  of                  the expansion project into the MidAmerican or other transmission                  provider’s delivery system), without the need to establish prudence or                  reasonableness. MidAmerican anticipates installing up to545 MW                  of                  additional wind capacity. MidAmerican shall be required to establish                  the                  prudence and reasonableness of any project costs in excess of the                  foregoing calculated per MW amount before the Iowa jurisdictional                  portion                  of such excess can be included in                  rates |

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|   | **Depreciation**                                                                 | The                  depreciation life of the 2006-2007 Expansion Project for ratemaking                  purposes shall be 20 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | **Return                  on Equity**                                            | The                  allowed return on common equity investment (ROE) on the portion                  of the                  2006-2007 Expansion Project included in Iowa electric rate base                  shall be                  11.9%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|   | **Renewable                  Energy****and                  CO****2****Credits** | The                  Iowa jurisdictional portion of any revenues from the sale of renewable                  energy credits and carbon dioxide credits associated with the 2006-2007                  Expansion Project shall be recorded above-the-line by MidAmerican                  in the                  accounts specified in Appendix 2 and included in the revenue sharing                  calculations of items “g” and “h” of, the Stipulation and Settlement in                  Docket No. RPU-03-1 and included in the revenue sharing calculation                  through calendar year 2012.                                                                                                                                                     |
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|   | **Federal                  Production****Tax                  Credit**           | The                  Iowa jurisdictional portion of any federal production tax credits                  associated with the 2006-2007 Expansion Project shall be recorded                  above-the-line by MidAmerican in the accounts specified in Appendix                  2 and                  included in the revenue sharing calculations of items “g” and “h” of the                  Stipulation and Settlement in Docket No. RPU-03-1 and included                  in the                  revenue sharing calculation through calendar year 2012.                                                                                                                                                                                                     |
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|   | **Wholesale                  Sales****Revenue**                                  | The                  Iowa jurisdictional portion of wholesale sales revenue associated                  with all                  generating units included in MidAmerican’s Iowa jurisdictional electric                  rate base (including the wind power facilities of the 2006-2007                  Expansion                  Project) shall be recorded above-the-line in the accounts specified                  in                  Appendix 2 and included in the revenue sharing calculations of                  items “g”                  and “h” of the Stipulation and Settlement in Docket No. RPU-03-1 and                  included in the revenue sharing calculation for through calendar                  year                  2012. |

|   | a. | **Revenue                  Sharing 2012**.                  Revenue sharing as approved by the Board in its October 17, 2003,“Order                  Approving Stipulation and Agreement,” in Docket No. RPU-03-l for the years                  2006-20 10 shall continue throughout 2012, except with respect                  to the                  method for crediting customers for any revenue sharing benefits.                  The                  customers’ share of any revenue sharing for 2012 earnings will he returned                  to the customers in 2013 through a bill-crediting mechanism approved                  by                  the Board in accordance with the methodology set out in the enclosed                  Attachment. |
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|   | b.     | **Restrictions                  on General Rate Increases.**                  MidAmerican commits not to seek any general rate increase in Iowa                  electric                  base rates to become effective during 2012, unless its Iowa jurisdictional                  return on equity on electric operations for calendar year 2011                  falls below                  10%. This provision shall not be interpreted to prevent the                  implementation, prior to December 31, 2012, of any electric rate or                  tariff changes approved by the Board in Docket No. RPU-04-2 and                  associated                  dockets.                                                                                                                                                                                           |
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|   | c.     | **Restrictions                  on Show Cause Filings.**The                  OCA commits not to seek any decrease in Iowa electric base rates                  to become                  effective before January 1, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   | d.     | **Data                  Submission.**On** **or                  before April 30, 2013, MidAmerican shall provide to the OCA all                  of the                  information (except written testimony), including electronic copies,                  required by the 199 Iowa Administrative Code 26.5(5)* *as                  this rule is written and in effect on the date of this settlement.                  The                  information shall reflect a 2012 test year and include a calculation                  and                  explanation of all known and measurable changes m costs and revenues                  that                  MidAmerican believes should be included as pro forma adjustments                  to test                  year 2012 results under the provisions of Iowa Code Section 476.33                  (2005). |

**Article        III**
**Joint        Motion**

**Article        IV -**
**Condition        Precedent**

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**Article        V  - Privilege and Limitation**

**Article        VI - Execution**

**Article        VII - Modification and Amendment**

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**Article        VIII -**
**Term**

| 1.     | Unless                  terminated earlier by operation of paragraph 2 of this Article,                  this                  Stipulation and Agreement shall terminate January 1, 2013, except                  for                  MEC’s responsibility for revenue sharing for the year 2012 and except                  for                  the Ratemaking Principles of the “Term” section in Article II that shall                  remain in effect as long as the wind power facilities of the Expansion                  Project continue to provide regulated electric service to Iowa                  consumers. |
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| 2.     | This                  Stipulation and Agreement and the obligations of the signatories                  shall                  terminate if:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   | a.     | the                  Board does not approve the terms of this Stipulation and                  Agreement;                                                                                                                                                                                                   |
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|   |   |                                                                                                                                                                                                                                                                                                        |
|   | b.     | MidAmerican                  is unable to secure access to sufficient transmission for the 2006-2007                  Expansion Project; or                                                                                                                                                                 |
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|   | c.     | On                  or before June 30, 2007, if MidAmerican determines that it is not                  likely                  to secure acceptable contracts that will result in the 2006-2007                  Expansion                  Project obtaining revenues in excess of                  costs. |

| 3. | In                  the event of termination pursuant to the preceding subparagraph,                  MidAmerican shall be permitted to record as above-the-line expenses                  an                  amortization over a 5-year period of all reasonable costs of the                  2006-2007                  Expansion Project, including cancellation costs, but shall not                  be entitled                  to recover a return on such costs. |
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**Article        IX - Binding Nature**

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**Article        X - Further Assurances**

**Article        XI - Entire Agreement**

|  MIDAMERICAN ENERGY COMPANY        |   |   |  OFFICE OF CONSUMER                ADVOCATE    |
|-----------------------------------------|--------|--------|-----------------------------------------------------|
|                                    |   |   |                                                |
| /s/ Todd                M. Raba    |   |   | /s/ John                R. Perkins   |
| Name:                 Todd M. Raba |   |   | Name:                 John R. Perkins          |
| Date:  12/15/05               |   |   | Date: 12/15/05                                 |

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**ATTACHMENT**

**2011-2012        IOWA ELECTRIC REVENUE SHARING REVENUE CREDIT**

**METHODOLOGY**

| 1.     | In                  the event that electric earnings exceed the revenue sharing threshold                  MidAmerican will calculate bill credits by: (1) determining the                  amount to                  be credited to each class, and (2) crediting to** **customers                  within each class in proportion to each customer’s 2011 or 2012 electric                  non-contract billed revenue. Credits will be applied to active                  Iowa                  non-contract electric customers and contract customers to the extent                  they                  were on tariff pricing in the year 2011 or 2012. Active customers                  are                  defined as customers of record receiving electric service during                  the                  single billing cycle in which revenue credits are applied to** **customers’                  bills. |
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| 2.     | The                  revenue credit, if any, will be allocated among the residential,                  commercial/small general service and industrial/large general service                  classes to provide an equal percentage bill credit per class. MidAmerican                  will allocate the revenue sharing credit to each class in proportion                  to                  2011 or 2012 non-contract billed revenues for each class. MidAmerican                  will                  further calculate a revenue sharing factor within each class to                  be applied                  to each customer’s 2011 or 2012 non-contract revenue. This factor will be                  determined by dividing the revenue sharing credit amount for each                  class as                  determined above by the 2011 or 2012 non-contract revenue within                  each                  class.  |

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| 3.     | During                  the first quarter of 2012 and 2013, MidAmerican will file its proposed                  bill credit analysis and applicable workpapers with the Iowa Utilities                  Board for review.                                                                                                                                                                                                                                                                       |
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| 4.     | MidAmerican                  will apply any bill credits during a single billing cycle subsequent                  to                  receipt of Iowa Utilities Board approval of MidAmerican’s                  filing.                                                                                                                                                                                                                                                                 |
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| 5*.*   | In                  the event that any active customers leave MidAmerican’s service territory                  subsequent to issuance of the bill credit and there is no bill                  available                  for credit, MidAmerican will contribute such revenue credit balance                  to the                  I-CARE program for distribution in those areas in which the former                  active                  customers had previously been located. |
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| 6.     | Within                  60 days of completion of the bill credits, MidAmerican will file                  a final                  report with the Iowa Utilities Board. No Iowa Utilities Board action                  will                  be required, unless the Iowa Utilities Board determines that MidAmerican                  has failed to issue the revenue credits in accordance with the                  Iowa                  Utilities Board’s prior approval.          |

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