EXHIBIT 10(b)


                        DIRECTOR RETIREMENT PLAN



           This Retirement Plan for the benefit of the Directors of  IES
INDUSTRIES,  INC.  is  adopted this 1st day of February,  1994,  amended
November  6, 1996, and revised effective May 22, 1997, by IES INDUSTRIES
INC. (hereafter the "Company").

WITNESSETH:

           WHEREAS,  the  Company  wishes  to  provide  a  non-qualified
retirement  benefit for its Directors, subject to a Director  satisfying
certain conditions and periods of service as a Director with the Company
as set forth herein.

           NOW, THEREFORE, the Company hereby adopts the following  non-
qualified Retirement Plan (the "Plan"):

                           ARTICLE I

           1.1   Right to Participate Under This Plan and Loss  of  Such
Right.   The  only individuals eligible to participate under  this  Plan
shall  be those Directors of the Company who are serving on the date  of
the  adoption  of this Plan or who subsequently serve on  the  Board  of
Directors of the Company, and who complete the required years of service
with  the  Company  as a Director and who satisfy the  other  terms  and
conditions of this Plan.

                           ARTICLE II

          2.1  Director.  "Director" shall mean an individual elected by
the  shareholders of the Company to serve as a member of  the  Board  of
Directors of the Company.

           2.2  Qualified Director.   "Qualified Director" shall mean  a
Director who has served at least forty-eight (48) months (service before
the  adoption of this Plan shall be taken into account for this purpose)
as  a Director of the Company, as a Director of IOWA SOUTHERN INC. or IE
INDUSTRIES  INC.  and who has not acted in a manner detrimental  to  the
best  interests of the Company as determined by the Board of  Directors.
The service requirement may be satisfied by continuous or non-continuous
service as a Director.

           2.3   Qualified Inside Director.  "Qualified Inside Director"
shall mean any Qualified Director who has served as a Director while  in
regular  employee  status with the Company, IES UTILITIES  INC.  or  any
affiliated companies.

           2.4  Annual Directors Fee.  "Annual Directors Fee" shall mean
the  annual  outside Directors Fee in effect at the time of a  Qualified
Director's  termination of his or her position as a  Director  with  the
Company.  For those Directors who are Directors as of November 6,  1996,
and  who  will  not  be a Director as a result of the Merger  among  WPL
Holdings, Inc. and Interstate Power Company, the "Annual Directors  Fee"
shall  mean the annual cash fee and the value of the common stock  award
in effect at the time of that Director's termination as a Director.

           2.5   Surviving  Spouse.  "Surviving Spouse" shall  mean  the
individual, if any, married to a Qualified Director at the time  of  his
or her death.

           2.6  Retirement Benefit.  "Retirement Benefit," shall mean an
amount equal to eighty percent (80%) of the Annual Directors Fee.   Such
benefit shall be paid on the date the Company pays Annual Directors Fee.

           2.7   Death  Benefit.  "Death Benefit" shall mean  an  amount
equal to eighty percent (80%) of the Annual Directors Fee.  Such benefit
shall be paid on the date the Company pays Annual Directors Fee.

           2.8  Board of Directors.  "Board of Directors" shall mean the
Board of Directors of the Company.

           2.9  Benefit Period.  "Benefit Period" shall mean a period of
four  (4) years plus one (1) additional year for each additional  twelve
(12)  months of service as a Director after forty-eight (48)  months  of
service,  subject to the limitation that in no event shall  the  Benefit
Period be more than eight (8) years.

                          ARTICLE III

           3.1  Receipt of Retirement Benefit upon Director's Retirement
from  the  Company.  Subject to Paragraph 3.2 of this  Article  and  the
provisions of Article V, a Qualified  Director shall receive  an  amount
equal  to  the  Retirement Benefit, as established in Paragraph  2.6  of
Article  II  of this Plan, for the Benefit Period, as established  under
Paragraph  2.9 of Article II.  The Retirement Benefit shall be  paid  to
the  Qualified Director or his or her Surviving Spouse.  Payment of  the
Retirement Benefit shall commence to a Qualified Director, other than  a
Qualified  Inside  Director, on the next date, following  the  Qualified
Director's  termination as a Director, that the Company pays the  Annual
Directors  Fee  to  its  Board of Directors except  that  payment  shall
commence  30 days following the effective date of the Merger  among  the
Company,  WPL  Holdings,  Inc. and Interstate Power  Company  for  those
Qualified  Directors who are Directors as of May 22, 1997 and  who  will
not  be  a Director as a result of the above referenced Merger.  Payment
of  the  Retirement Benefit shall be made to a Qualified Inside Director
on  the  next  date  one (1) year following the later of  the  Qualified
Inside Director's termination as a Director or termination of employment
with  the  Company  or any affiliate that the Company  pays  the  Annual
Directors Fee to its Board of Directors.

           3.2  Benefit Payable to Surviving Spouse Prior to Receipt  by
Director  of Benefits for the Benefit Period.  Subject to the provisions
of  Article V, in the event of the death of the Qualified Director after
termination as a Director, but prior to the Qualified Director receiving
the Retirement Benefit payments for the Benefit Period that he or she is
entitled  to  receive  from the Company under this Plan,  the  Surviving
Spouse  of  the  Qualified  Director shall be entitled  to  receive  the
Retirement Benefit payments under this Plan until the earlier of (a) the
receipt  by  the Qualified Director and his or her Surviving  Spouse  of
Retirement Benefit payments under this Plan for the Benefit Period  that
the  Director  was  entitled to receive; or (b) the  Surviving  Spouse's
death.

           3.3   Receipt  of  Retirement Benefit Upon  Merger  With  WPL
Holdings,  Inc. and Interstate Power Company.  Subject to Paragraph  3.2
of  the Article and the provisions of Article V, Qualified Directors and
Qualified  Inside  Directors, who become Directors of Interstate  Energy
Corporation upon the merger of the Company with WPL Holdings,  Inc.  and
Interstate  Power  Company,  shall  receive  an  amount  equal  to   the
Retirement  Benefit, as established in Paragraph 2.6 of  Article  II  of
this Plan, for the Benefit Period, as established under Paragraph 2.9 of
Article  II.   The  Retirement Benefit shall be paid  to  the  Qualified
Director or Qualified Inside Director or to his or her Surviving Spouse.
Payment  of the Retirement Benefit shall commence 30 days following  the
effective date of the Merger among the Company, WPL Holdings,  Inc.  and
Interstate Power Company.

                           ARTICLE IV

          4.1  Death Benefit Payable Prior to Termination as a Director.
Subject to the provisions of Article V, if a Director dies while serving
as  a Director with the Company and at the time of death was a Qualified
Director, the Company shall pay to the Surviving Spouse of the Qualified
Director  a  Death  Benefit  as defined in  Paragraph  2.7.   The  Death
Benefit,  if  any, payable under this Article is to be  made  in  yearly
payments (on the date that Company pays the Annual Directors Fee) for  a
period  equal to the Benefit Period for which the Director was  entitled
to  receive benefit payments at the time of his or her death.  The first
payment to be made under this Article shall be on the next date that the
Company  pays  its  Annual  Directors Fee following  the  death  of  the
Director.  If the Qualified Director leaves no Surviving Spouse  or  the
Surviving  Spouse dies prior to the receipt of the yearly Death  Benefit
payments that he or she is entitled to receive, the Death Benefit  shall
terminate  and the Company shall have no further obligation  under  this
Plan.

                           ARTICLE V

           5.1   Retirement  Benefit  or Death  Benefit  Payable  if  No
Surviving  Spouse.  In the event a Qualified Director  dies  leaving  no
Surviving Spouse or, if at any time during the Benefit Period or  during
the  period  for  payment  of the Death Benefit  under  Article  IV  the
Qualified  Director's  Surviving  Spouse  dies,  the  payments  to   the
Surviving  Spouse shall terminate and the Company shall have no  further
obligation under Articles III or IV.

           5.2   No  Payment  to the Qualified Director's  or  Surviving
Spouse's  Estate.   In no event shall any payment  under  this  Plan  be
payable  to  the  estate of any Qualified Director, the  estate  of  any
Qualified  Director's Surviving Spouse or to any heir of either  of  the
above.

           5.3  No Payment Beyond Benefit Period.  In no event shall the
Director  or  his  or  her Surviving Spouse be  entitled  to  receive  a
Retirement Benefit or a Death Benefit for more than the Benefit Period.

                           ARTICLE VI

           6.1   Unsecured  Obligation.  The Company's obligation  under
this  Plan  to the Qualified Director or his or her Surviving Spouse  is
solely  an unsecured promise of the Company and nothing herein shall  be
construed to give the Qualified Director or his or her Surviving  Spouse
any  right, title, interest or claim in or to any specific asset,  fund,
reserve, account or property of any kind whatsoever owned by the Company
or  in  which it may have any right, title, or interest now  or  in  the
future.   The  Qualified Director or his or her Surviving  Spouse  shall
have  only the right to enforce a claim against the Company in the  same
manner as any unsecured creditor.

                          ARTICLE VII

           7.1   Modifications.  At any time this Plan may be terminated
or  amended by action of the Board of Directors in its sole and absolute
discretion  without notice, consent or approval of  any  Director.   The
right  of the Board of Directors to amend or terminate this Plan at  any
time  shall  include  the  absolute discretion to  make  any  amendments
prospective or retroactive in application, except that no such amendment
or  termination  shall terminate or reduce any benefit  to  a  Qualified
Director or his or her Surviving Spouse after that Qualified Director or
his  or her Surviving Spouse has received one (1) annual benefit payment
under this Plan.

            7.2    Administration  and  Interpretation  of  this   Plan.
Interpretation by the Board of Directors shall be final and binding upon
a  Director.  The Board of Directors in its sole and absolute discretion
shall  have  the right to determine whether a Director has  acted  in  a
manner  detrimental to the best interests of the Company.  The Board  of
Directors  may adopt rules and regulations relating to this Plan  as  it
may  deem  necessary or advisable for the administration of  this  Plan,
including designating a committee to act on behalf of the full Board  of
Directors.

           7.3   Claims  Procedure.   If  a Qualified  Director  or  the
Qualified  Director's Surviving Spouse (hereinafter  referred  to  as  a
"Claimant") is denied the Retirement Benefit or the Death Benefit  under
this Plan for any reason including a determination that the Director has
acted  in a manner detrimental to the best interests of the Company,  he
or  she  may  file a claim with the Board of Directors.   The  Board  of
Directors  shall notify the Claimant within sixty (60) days of allowance
or denial of the claim, unless the Claimant receives written notice from
the  Board  of Directors prior to the end of the sixty (60)  day  period
stating that special circumstances require an extension of the time  for
decision.   Notice  of  the Board of Directors'  decision  shall  be  in
writing sent by mail to Claimant's last known address, and, if a  denial
of the claim, must contain the following information:

                     a.   specific reasons for the denial;

                     b.   specific reference to pertinent provisions  of
          this Plan on which the denial is based; and

                     c.   if applicable, a description of any additional
          information  or material necessary to perfect  the  claim,  an
          explanation  of why such information or material is  necessary
          and an explanation of the claims review procedure.

          7.4  Review Procedure.

                     a.   A Claimant is entitled to request a review  of
          any  denial of his or her claim for the Retirement Benefit  or
          Death  Benefit  by the Board of Directors.   The  request  for
          review must be submitted in writing within sixty (60) days  of
          mailing  of  the notice of the denial.  Absent a  request  for
          review  within  the sixty (60) day period, the claim  will  be
          deemed to be conclusively denied.  The Claimant or his or  her
          representative  shall  be  entitled to  review  all  pertinent
          documents,  and to submit issues and comments  orally  and  in
          writing.

                     b.   The review shall be conducted by the Board  of
          Directors, which shall afford the Claimant a hearing  and  the
          opportunity  to  review  all pertinent  documents  and  submit
          issues  and  comments orally and in writing.    The  Board  of
          Directors  shall  render a decision within  ninety  (90)  days
          after  receipt  of a request for a review, provided  that,  in
          special  circumstances  (such as the necessity  of  holding  a
          hearing)  the  Board  of Directors may  extend  the  time  for
          decision by not more than sixty (60) days upon written  notice
          to the Claimant.  The Claimant shall receive written notice of
          the   Board  of  Directors'  review  decision,  together  with
          specific  reasons  for  the decision  and  references  to  the
          pertinent provisions of this Plan.

                          ARTICLE VIII

            8.1     Assignability  of  Benefits.   Neither  a  Qualified
Director,  nor  his  or her Surviving Spouse, shall have  the  power  to
transfer,  assign, anticipate, mortgage or otherwise encumber any  right
to  receive  Retirement Benefits or Death Benefits in  advance  of  such
payment  and any attempted transfer, assignment, anticipation,  mortgage
or  encumbrance shall be void.  No payment shall be subject  to  seizure
for  payment of public or private debts, judgments, alimony or  separate
maintenance,  or  be transferred by operation of law  in  the  event  of
bankruptcy, insolvency or otherwise.

                           ARTICLE IX

           9.1  Covenant Not to Compete.  Payments pursuant to this Plan
also  serve as consideration for the following covenant not to  compete.
Notwithstanding anything in this Plan to the contrary, it  is  expressly
agreed  that  the Retirement Benefit or the Death Benefit payment  under
this  Plan shall terminate as to the Qualified Director and his  or  her
Surviving Spouse and the Company shall have no further obligation  under
this  Plan upon the violation of the provisions of Paragraph 9.2 by  the
Qualified Director.

           9.2   If the Qualified Director, during the period set  forth
herein  and  within  the  service area  in  which  the  Company  or  any
affiliated companies provide utility services or, in the case of any non-
utility  business, within the geographic area served by  such  business,
accepts  employment or engages in any business as an employee,  officer,
consultant,  director or becomes a partner or shareholder  (except  that
the Qualified Director and his or her Surviving Spouse may hold up to  a
five percent (5%) interest in any company that is traded on the New York
Stock  Exchange,  American  Stock Exchange or other  national  over-the-
counter  exchange)  in  any  company that is  in  competition  with  the
business  of  the  Company or any of its affiliated companies,  and  the
Qualified  Director fails to terminate such position within thirty  (30)
days  after notice from the Board of Directors to the Qualified Director
of the violation of this covenant not to compete, the Qualified Director
and  the Qualified Director's Surviving Spouse shall forfeit all  rights
to  future  payments  under this Plan, and the  Company  shall  have  no
further obligation under this Plan.  Any violation of the provisions set
forth  above  during the period the Qualified Director is receiving  any
payments under this Plan beginning with the date of the receipt  of  the
first  payment  under  this Plan shall constitute a  violation  of  this
Article and result in the termination of all future payments under  this
Plan.   The  determination of the Board of Directors  as  to  whether  a
business  is in competition with the Company and whether the Competition
is   occurring  in  the  geographic  area  designated  above  shall   be
controlling for purposes of this Plan.

                           ARTICLE X

           10.1   Applicable Law.  This Plan shall be  governed  by  and
construed in accordance with the laws of the State of Iowa and venue for
any action brought under this Agreement shall be in Linn County, Iowa.

           10.2   Tax  Withholding.   The  Company  shall  withhold  all
applicable taxes required on all payments under this Plan.

                           ARTICLE XI

          11.1  Headings.  The headings in this Plan are for convenience
only and shall not be used to interpret or construe its provisions.