EXHIBIT 10.1
                                                                      12/18/96


                           MIDAMERICAN ENERGY COMPANY
                      SEVERANCE PLAN FOR SPECIFIED OFFICERS
                             DATED NOVEMBER 1, 1996


1.    Purpose

      The purpose of this  Severance  Plan  adopted  this first day of November,
1996 by MidAmerican Energy Company (the "Company") is to encourage the continued
attention and  dedication of the Specified  Officers to their  assigned  duties,
without distraction, in the face of the potentially disruptive forces present in
an industry undergoing fundamental marketplace changes.

2.    Qualification for Severance Benefits

      A Specified  Officer  shall be entitled to receive  Severance  Benefits if
such  Specified  Officer  incurs a Qualifying  Termination  under  Section 4(a).
Further,  in the event of a section 4(b) Qualifying  Termination,  the Specified
Officer must resign within the twenty-four (24) month period referred to in that
section in order to be  entitled to receive  Severance  Benefits.  No  Severance
Benefits  shall become due or payable  unless and until the  conditions  of this
section occur.

3.    Specified Officers

      The persons who are  potentially  eligible to receive  benefits under this
Severance  Plan are set forth on Appendix I,  attached  hereto and  incorporated
herein.  Those persons are herein referred as "Specified  Officers." A Specified
Officer  becomes  enrolled in this  Severance  Plan only upon the execution of a
release and waiver  ("Release and Wavier") in the form set forth in Appendix II,
attached hereto and incorporated herein.

4.    Qualifying Termination

      For the purpose of this Severance Plan, a "Qualifying  Termination"  shall
mean (a) the  involuntary  termination of employment of a Specified  Officer for
any reason,  except for a felony situation as provided in this Section; or (b) a
voluntary termination of employment within twenty-four (24) full calendar months
after a Change  of  Control,  should a  Specified  Officer's  (i) job  reporting
location be changed by more than thirty (30) miles, (ii) total cash compensation
opportunity  be reduced or (iii) duties and  responsibilities  be  substantially
reduced.

      "Change  in  Control"  shall  mean  either  (a)  the  closing  date of the
restructuring of the Company as a result of mergers, consolidations, takeover or
reorganization unless at least sixty

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percent  (60%) of the members of the Board of  Directors of the  corporation  or
other   entity   resulting   from  such  merger,   consolidation,   takeover  or
reorganization  were members of the Incumbent Board or (b) any occurrence or any
other event that is designated as being a "Change in Control" by a majority vote
of the  directors  of the  Incumbent  Board  who are not also  employees  of the
Company.

      "Incumbent  Board" shall mean the members of the Board of Directors of the
Company on November  1, 1996.  For this  purpose,  an  individual  who becomes a
member of the Board  subsequent  to November 1, 1996 and who has been  nominated
for election by the Company's shareholders by resolution adopted by a vote of at
least two-thirds  (66-2/3%) of the directors then comprising the Incumbent Board
at a duly  convened  meeting  thereof  shall be  deemed  to be a  member  of the
Incumbent Board.

      Termination of employment  due, in whole or in part, to the commission and
conviction of a felony by a Specified  Officer shall not constitute a Qualifying
Termination  under this Severance  Plan. All Severance  Benefits for a Specified
Officer  charged with a felony shall be suspended  until such time as the felony
charge is  finally  disposed.  Conviction  of a felony  shall be  sufficient  to
disqualify the Specified Officer for Severance Benefits. A plea of no contest to
a felony charge shall not be sufficient to disqualify the Specified  Officer for
Severance Benefits.

5.    Severance Benefits

      For the purpose of this Severance Plan, "Severance Benefits" shall mean:

     a.   an amount equal to two (2) times the Specified Officer's highest Total
          Cash  Compensation,  said  amount  to be  paid  in a  lump  sum on the
          effective  date  of  his/her  Qualifying  Termination  (except  in the
          circumstance of a felony situation as provided above); and

     b.   the  Specified  Officer's  accrued  vacation pay through the effective
          date of his/her  Qualifying  Termination,  said amount to be paid in a
          lump sum on the effective date of such Qualifying Termination; and

     c.   continuation  of  health  and term  life  for  twenty-four  (24)  full
          calendar  months after the effective  date of the Specified  Officer's
          Qualifying   Termination   at  the  same  cost  and  at  the  same  or
          substantially  similar  coverage  levels  as are in  effect  under the
          Company's group plans on such effective date;  provided,  however,  in
          the  event the cost  and/or  coverage  level  shall  change  under the
          Company's  group plans at any time during the  twenty-four  (24) month
          period the level likewise shall change for such Specified Officer in a
          corresponding manner; and


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     d.   standard  outplacement  services from a nationally  recognized firm of
          the Specified  Officer's selection for a period up to twenty-four (24)
          full  calendar  months  after  the  effective  date of the  Qualifying
          Termination  or  until  such  Specified  Officer  obtains  employment,
          whichever is less.  The cost of such services  shall not exceed twenty
          percent (20%) of the Specified Officer's Total Cash Compensation.

6.   Term

      This Severance Plan shall be effective as of November 1, 1996 and continue
thereafter  through  December 31, 2001. The Plan may be terminated or amended at
any time;  provided,  however,  that such a termination  or amendment  shall not
affect the  Severance  Benefits to be provided  under the Plan for any Specified
Officer  listed on  Appendix  I without  the  express  written  consent  of such
Specified Officer.

7.    Total Cash Compensation

      The term  "Total  Cash  Compensation"  shall mean the amount  payable to a
Specified Officer by the Company or its predecessors as annual salary and Bonus,
without  regard to deferrals.  For the purpose of this Plan,  "Bonus" shall mean
the  larger  of (i) the  three-year  average  of  bonuses  actually  paid to the
Specified  Officer or (ii) the three-year  average of accruals to the account of
the Specified Officer under any Key Employee Annual Incentive Plan. In the event
that less than three  years of  payments or  accruals  have  occurred,  then the
average of any payments or accruals, respectively, shall be used.

8.    Taxes

     A.   The  corporation  paying the Severance  Benefits  shall be entitled to
          withhold all federal,  state,  local, or other taxes legally  imposed,
          subject to subparagraphs B, C and D hereof.

     B.   In the event any of the  Severance  Benefits  payable  to a  Specified
          Officer are subject to the tax ("Excise  Tax") imposed by Section 4999
          of the  Internal  Revenue  Code of 1986 (or any  similar  tax that may
          hereafter be imposed) ("Code"),  the corporation paying such Severance
          Benefits  shall pay to the  Specified  Officer  in cash an  additional
          amount  ("Gross-Up  Payment") such that the net amount retained by the
          Specified  Officer  after  deduction  of any Excise Tax payable on the
          Severance  Benefits and any federal,  state,  and local income tax and
          Excise Tax payable  upon the  Gross-Up  Payment  shall be equal to the
          Severance  Benefits.  Such  Gross-Up  Payment  shall  be  made  by the
          corporation to the Specified  Officer on the effective date of his/her
          Qualifying Termination.


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     C.   For the purpose of determining  whether any of the Severance  Benefits
          will be subject to the Excise Tax and the amount of such Excise Tax:

          (a)  any other  payments of  benefits  received or to be received by a
               Specified  Officer in  connection  with  his/her  termination  of
               employment  (whether  pursuant  to the  terms of this Plan or any
               other  plan,  arrangement,  or  agreement)  shall be  treated  as
               "parachute  payments" within the meaning of Section 280G(b)(2) of
               the Code, and all "excess parachute  payments" within the meaning
               of Section 280(G)(b)(1) shall be treated as subject to the Excise
               Tax,  unless in the  opinion  of tax  counsel,  selected  by such
               Specified  Officer,  such other payments or benefits (in whole or
               in part)  do not  constitute  parachute  payments,  or that  such
               excess  parachute  payments  (in  whole  or  in  part)  represent
               reasonable compensation for services actually rendered within the
               meaning of Section 280G(b)(4) in excess of the base amount within
               the meaning of Section  280G(b)(3),  or are otherwise not subject
               to the Excise Tax; and

          (b)  the  amount of  Severance  Benefits  which  shall be  treated  as
               subject  to the  Excise  Tax shall be equal to the lesser of: (i)
               the total  amount of  Severance  Benefits;  or (ii) the amount of
               excess   parachute   payments   within  the  meaning  of  Section
               280G(b)(1) of the Code (after applying clause (a) above); and

          (c)  the value of any  noncash  benefits  or any  deferred  payment or
               benefit shall be determined  by the  independent  auditors of the
               corporation paying such Severance Benefits in accordance with the
               principles  of  Sections  280G(d)  of  the  Code  and  applicable
               regulations.

               For  the  purpose  of  determining  the  amount  of the  Gross-Up
               Payment,  the  Specified  Officer  shall be deemed to pay federal
               income  taxes at the  highest  marginal  rate of  federal  income
               taxation in the calendar year in which such  Gross-Up  Payment is
               to be made and  state  and  local  income  taxes  at the  highest
               marginal  rate of  taxation  in the  state  and  locality  of the
               Specified  Officer's  residence on the effective  date of his/her
               Qualifying  Termination,  net of the maximum reduction in federal
               income taxes which could be obtained from deduction of such state
               and local taxes.

     D.   In the event the Internal  Revenue  Service  adjusts the  computations
          under  paragraph C hereof  such that the  Specified  Officer  does not
          receive the maximum Severance  Benefits  (including  Gross-Up Payment)
          permitted by this Plan, the corporation paying such Severance Benefits
          shall reimburse the Specified Officer

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          for the full amount  necessary to make him/her  whole,  plus  interest
          from the date such  additional  Severance  Benefits  became due to the
          date of such  payment at the prime rate as may be  established  by The
          First National Bank of Chicago from time-to-time.

9.    Employment Status

      In no event  shall  any  Specified  Officer  be  obligated  to seek  other
employment or to take other action by way of  mitigation of the amounts  payable
to such Officer  under the  provisions  of this  Severance  Plan,  nor shall the
amount of any payment  hereunder be reduced by any  compensation  earned by such
Specified Officer as a result of employment by another employer.

      Nothing herein contained shall be deemed to create an employment agreement
with the  Specified  Officer  providing  for the  employment  of such  Specified
Officer for any fixed period of time.

10.   Other Benefits

      Except to the extent  provided  in the  Release  and  Waiver,  neither the
provisions of this  Severance Plan nor the right to receive  Severance  Benefits
shall reduce any amounts  otherwise  payable to any Specified  Officer or in any
way diminish his/her rights under any benefit, bonus,  incentive,  stock option,
stock bonus or other stock  purchase  plan,  or any employee  agreement,  or any
other plan,  program  policy or  practice  for which the  Specified  Officer may
qualify.  Except to the  extent  provided  in the  Release  and  Waiver,  vested
benefits and other amounts which the Specified Officer is otherwise  entitled to
receive  under any plan,  program,  policy or practice at or  subsequent  to the
effective  date of such  Specified  Officer's  Qualifying  Termination  shall be
payable in accordance with such plan, program, policy or practice.

11.   Contractual Rights

      This Plan establishes in each Specified Officer a right to the benefits to
which he or she is entitled hereunder.  This Plan shall inure to the benefit of,
and  be   enforceable   by,   each   Specified   Officer's   personal  or  legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees and legatees.  If a Specified Officer dies while any Severance Benefits
would still be payable to him/her  under this  Severance  Plan,  all such unpaid
amounts shall be paid to such Specified Officer's  designated  beneficiaries or,
in the absence thereof, to such Specified Officer's estate.


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12.   No Separate Fund Required

      Nothing  herein  contained  shall  require  or be  deemed to  require,  or
prohibit or be deemed to prohibit,  that the Company  segregate or otherwise set
aside any funds or other  assets,  in trust or  otherwise,  to  provide  for the
payment of Severance Benefits.

13.   Legal Remedies

     A.   To the extent  permitted by law, the corporation  obligated to pay any
          Severance  Benefits  shall pay all  legal  fees,  cost of  litigation,
          prejudgment  interest,  and other  expenses  incurred in good faith by
          each Specified  Officer as a result of such  corporation's  refusal to
          provide the Severance  Benefits to which the Specified Officer becomes
          entitled  under  this  Plan,  or as a  result  of  such  corporation's
          contesting the validity,  enforceability,  or  interpretation  of this
          Plan,  or as a  result  of  any  conflict  pertaining  to  this  Plan,
          regardless of whether the Specified Officer prevails.

     B.   Each  Specified  Officer  shall have the right and option to elect (in
          lieu of litigation)  to have any dispute or controversy  arising under
          or in connection with this Plan settled by arbitration conducted by an
          arbitrator  in accordance  with the rules of the American  Arbitration
          Association  then  in  effect.  A  Specified   Officer's  election  to
          arbitrate and the decision of the arbitrator in that proceeding  shall
          be binding on the parties to such arbitration.

          Judgment  may be entered on the award of the  arbitrator  in any court
          having jurisdiction.  All expenses of such arbitration,  including the
          fees and expenses of the counsel for the Specified  Officer,  shall be
          borne by the corporation which is the party to the arbitration.

14.   Severability

      In the event any provision of this Severance Plan shall be held illegal or
invalid for any  reason,  such  illegality  or  invalidity  shall not effect the
remaining  parts of this Plan,  and this Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

15.   Successors and Assigns

      This Severance Plan for all enrolled  Specified  Officers shall be binding
upon the Company, its successors and assigns in accordance with its terms.



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16.   Captions

      The  captions  of this  Severance  Plan  are not a part of the  provisions
hereof and shall have no force and effect.

17.   Applicable Law

      This Severance  Plan shall be  interpreted in accordance  with the laws of
the State of Iowa.


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                                  APPENDIX I
                          LIST OF SPECIFIED OFFICERS


                                   B. E. Gale
                                S. E. Hollonbeck
                                   D. J. Levy
                                  P. G. Lindner
                                 J. A. Rasmussen
                                  S. E. Shelton
                                  R. W. Stepien
                                  B. A. Wharton


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                                   APPENDIX II

                           FORM OF RELEASE AND WAIVER

      In  consideration  of  the  undersigned   Specified   Officer's  voluntary
execution  and delivery of this Release and Waiver,  the  undersigned  Specified
Officer relinquishes all right,  interest and claim under the Severance Plan for
Specified Officers associated with the merger of Midwest Resources Inc., Midwest
Power  Systems Inc.  and  Iowa-Illinois  Gas and Electric  Company with and into
MidAmerican  Energy  Company and the Severance  Plan in the event of a Change In
Control of Iowa-Illinois Gas and Electric Company (the "Predecessor Plans"), and
hereby becomes a participant in the  MidAmerican  Energy Company  Severance Plan
for Specified  Officers,  dated November 1, 1996 and is hereby granted (i) three
years of additional  credit under the  MidAmerican  Energy Company  Supplemental
Retirement  Plan  for  Designated  Officers  and  any  other  similar  plan of a
predecessor  to MidAmerican  Energy  Company under which a Specified  Officer is
entitled to participate and (ii) a retention  bonus,  both (i) and (ii) are more
fully  described  on  Exhibit A attached  hereto and made a part  hereof by this
reference.

      By  execution of this Release and Waiver,  (x) the  undersigned  Specified
Officer  specifically,  voluntarily and irrevocably waives all right,  interest,
and claim to benefits by, through,  or under the Predecessor  Plans and releases
Iowa-Illinois Gas and Electric Company,  Midwest Resources,  Inc., Midwest Power
Systems Inc., MidAmerican Energy Company,  their respective directors,  officers
and employees and such parties'  respective  successors and assigns with respect
to any right,  interest  or claim in and to  benefits  by,  through or under the
Predecessor  Plans  and (y)  MidAmerican  Energy  Company,  its  successors  and
assigns,  becomes  obligated to the undersigned  Specified Officer in accordance
with the terms of the  MidAmerican  Energy Company  Severance Plan for Specified
Officers,  dated  November 1, 1996 and for three years of additional  credit and
for a retention  bonus as described in (i) and (ii) of the  preceding  paragraph
and Exhibit A.

      Dated this ___________ day of _______________________, 1996


                                    MidAmerican Energy Company

                                    by _______________________________________


                                    __________________________________________
                                                Specified Officer



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                                    EXHIBIT A

               Supplemental Executive Retirement Plan Enhancement

      Each Specified  Officer is hereby granted three years of additional credit
under the  Supplemental  Retirement Plan For Designated  Officers of MidAmerican
Energy Company and any other similar plan of a predecessor to MidAmerican Energy
Company under which a Specified Officer is entitled to participate, which credit
may be used, at the election of the  Specified  Officer,  to reflect  additional
covered service or increase assumed age at retirement.

                                 Retention Bonus

      MidAmerican   Energy  Company  hereby  grants  each  Specified  Officer  a
retention bonus,  conditioned upon being in the employment of MidAmerican Energy
Company or one of its corporate  affiliates on the dates specified below, and in
the amounts specified below:


                                               ANNUAL BASE SALARY AS OF
                 DATE                              NOVEMBER 1, 1996
                ------                         ------------------------
                1-1-98                                  33 1/3%
                1-1-99                                  33 1/3%
                1-1-00                                  33 1/3%


      The Retention Bonus will be provided to the Specified  Officer as deferred
compensation.  This  deferred  compensation  will  become  a part of and will be
administered  under the guidelines set forth in the  MidAmerican  Energy Company
Deferred Compensation Plan for Executives.


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