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                                                                       EXHIBIT 2

                         AGREEMENT AND PLAN OF EXCHANGE

    THIS  AGREEMENT AND PLAN OF EXCHANGE  ("Agreement"), dated as of January 24,
1996, is between MidAmerican Energy Company, an Iowa corporation  ("MidAmerican"
or  "Company"), the company whose shares will  be acquired pursuant to the Share
Exchange (described hereinafter),  and MidAmerican Energy  Holdings Company,  an
Iowa  corporation ("Holdings"), the acquiring  company. MidAmerican and Holdings
are hereinafter sometimes referred to, collectively, as the "Companies".

                                  WITNESSETH:

    WHEREAS, the  authorized  capital  stock  of  MidAmerican  consists  of  (a)
350,000,000  shares of common stock without  par value ("Company Common Stock"),
of which  100,751,713 shares  are issued  and outstanding,  and (b)  100,000,000
shares  of preferred  stock, without par  value ("Company  Preferred Stock"), of
which 3,217,769 shares are issued and outstanding; and

    WHEREAS, Holdings has 1,000 shares of common stock, no par value, ("Holdings
Common  Stock")  presently  authorized,  issued  and  outstanding,  and  at  the
Effective  Time  (as  hereinafter  defined),  the  authorized  capital  stock of
Holdings will consist of (a) 350,000,000 shares of Holdings Common Stock and (b)
100,000,000 shares  of  preferred  stock,  no  par  value  ("Holdings  Preferred
Stock"); and

    WHEREAS, the Boards of Directors of each of MidAmerican and Holdings deem it
desirable and in the best interests of the Companies and their shareholders that
each  share of Company Common Stock be  exchanged for a share of Holdings Common
Stock with the result that Holdings becomes the owner of all outstanding Company
Common Stock and each  holder of Company  Common Stock becomes  the owner of  an
equal  number of shares of Holdings Common  Stock, all pursuant to the terms and
conditions hereinafter set forth ("Share Exchange"); and

    WHEREAS, the Iowa Business Corporation Act ("IBCA") permits share  exchanges
which bind all of the shareholders upon the approval of a plan of share exchange
by the holders of a majority of all votes entitled to be voted thereon; and

    WHEREAS,   the  Boards  of  Directors   of  MidAmerican  and  Holdings  have
recommended that their  respective shareholders approve  the Share Exchange  and
this  Agreement, and this Agreement  has been approved by  the requisite vote of
Holdings' shareholder pursuant to Section 490.1103 of the IBCA;

    NOW, THEREFORE, in  consideration of  the premises, and  of the  agreements,
covenants  and conditions hereinafter  contained, the parties  hereto agree with
respect to the Share Exchange that, at the Effective Time, each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time will
be exchanged for  one share of  Holdings Common  Stock, and that  the terms  and
conditions of the Share Exchange and the method of carrying the same into effect
are as follows:

                                   ARTICLE I

    Subject to the satisfaction of the conditions and obligations of the parties
hereto,  the Share  Exchange will  be effective upon  the filing,  with the Iowa
Secretary of State, in accordance with  the IBCA, of articles of share  exchange
("Articles  of Exchange") with  respect to the  Share Exchange or  at such later
time as may be stated in the Articles  of Exchange (the time at which the  Share
Exchange becomes effective being referred to herein as the "Effective Time").

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                                   ARTICLE II

    (1) The name of the corporation whose shares will be acquired is MidAmerican
Energy  Company, and the name of the acquiring corporation is MidAmerican Energy
Holdings Company.

    (2) The terms and conditions  of the exchange, and  the manner and basis  of
exchanging  the shares  of Company  Common Stock  to be  acquired for  shares of
Holdings Common Stock, are as follows:

    At the Effective Time:

        (a)  Each  share  of  Company   Common  Stock  issued  and   outstanding
    immediately  prior to the Effective Time shall be exchanged for one share of
    Holdings  Common   Stock,  which   shall  thereupon   be  fully   paid   and
    non-assessable,   except  the  shares  for  which  dissenters'  rights  were
    exercised;

        (b) Holdings  shall become  the  owner and  holder  of each  issued  and
    outstanding share of Company Common stock so exchanged;

        (c)   Each  share  of  Holdings  Common  Stock  issued  and  outstanding
    immediately prior  to  the  Effective  Time  shall  be  canceled  and  shall
    thereupon  constitute an  authorized and  unissued share  of Holdings Common
    Stock;

        (d) The former owners of Company Common Stock shall be entitled only  to
    receive shares of Holdings Common Stock as provided herein; and

        (e)  Holders  of Company  Common Stock  who exercised  their dissenters'
    rights in accordance with the IBCA  shall be entitled to receive payment  of
    "fair value" for their shares of Company Common Stock.

    Shares  of outstanding  Company Preferred  Stock shall  not be  exchanged or
otherwise affected by the Share Exchange.

                                  ARTICLE III

    The  consummation  of  the  Share  Exchange  is  subject  to  the  following
conditions precedent:

        (1)  The receipt of the requisite approval  of the Share Exchange by the
    holders of Company Common Stock;

        (2) The  filing  of  Restated  Articles  of  Incorporation  of  Holdings
    increasing  the number  of authorized  shares of  Holdings Common  Stock and
    Holdings  Preferred   Stock   to   350,000,000   and   100,000,000   shares,
    respectively, in the form attached hereto as Exhibit A;

        (3) The satisfaction of the respective obligations of the parties hereto
    set  forth in  this Agreement  in accordance  with the  terms and conditions
    herein contained;

        (4) The  execution and  filing of  Articles of  Exchange with  the  Iowa
    Secretary  of State  pursuant to  the IBCA  in the  form attached  hereto as
    Exhibit B;

        (5) The approval for listing upon official notice of issuance by the New
    York Stock Exchange of Holdings Common Stock to be issued in accordance with
    this Agreement;

        (6) The  receipt of  either a  ruling of  the Internal  Revenue  Service
    satisfactory  to  MidAmerican  and its  counsel,  or an  opinion  of counsel
    satisfactory to MidAmerican,  with respect  to the tax  consequences of  the
    Share Exchange and other transactions incident thereto; and

        (7)  The receipt  of such  orders, authorizations,  approvals or waivers
    from all jurisdictional  regulatory bodies,  boards or  agencies, which  are
    required in connection with the Share Exchange and related transactions.

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                                   ARTICLE IV

    Holdings  will not  engage in any  business following the  execution of this
Agreement until the consummation of the Share Exchange, other than such business
as is necessary to organize and maintain the corporate status and good  standing
of  Holdings in  the State  of Iowa  and such  other states  in which  it may be
authorized to conduct business.

                                   ARTICLE V

    This Agreement may be amended, modified or supplemented, or compliance  with
any  provision or  condition hereof may  be waived,  at any time,  by the mutual
consent of the Board of Directors of each of MidAmerican and Holdings; provided,
however, that no  such amendment,  modification, supplement or  waiver shall  be
made  or effected, if such amendment,  modification, supplement or waiver would,
in the  judgment  of the  Board  of  Directors of  MidAmerican,  materially  and
adversely affect the shareholders of MidAmerican.

    This  Agreement  may  be  terminated  and  the  Share  Exchange  and related
transactions abandoned at any  time prior to the  time the Articles of  Exchange
are  filed  with the  Iowa  Secretary of  State, if  the  Board of  Directors of
MidAmerican determines, in its sole  discretion, that consummation of the  Share
Exchange  would be inadvisable or not in the best interest of MidAmerican or its
shareholders.

                                   ARTICLE VI

    This Agreement  has  been  submitted  to the  shareholder  of  Holdings  for
approval,  and  the  shareholder of  Holdings  has approved  this  Agreement, as
provided by the IBCA.

                                  ARTICLE VII

    Following the Effective Time, each  holder of an outstanding certificate  or
certificates  theretofore representing shares  of Company Common  Stock may, but
shall not be required  to, surrender the same  to Holdings for cancellation  and
reissuance  of a new  certificate or certificates  in such holder's  name or for
cancellation and transfer, and each such  holder or transferee will be  entitled
to  receive a certificate or certificates representing the same number of shares
of Holdings  Common Stock  as  the shares  of  Company Common  Stock  previously
represented by the certificate or certificates surrendered. Until so surrendered
or presented for transfer, each outstanding certificate which, immediately prior
to  the Effective  Time, represented  Company Common  Stock shall  be deemed and
treated for all corporate purposes to represent the ownership of the same number
of shares of  Holdings Common  Stock as though  such surrender  or transfer  had
taken  place. The holders  of Company Common  Stock at the  Effective Time shall
have no right to have  their shares of Company  Common Stock transferred on  the
stock  transfer books  of MidAmerican,  and such  stock transfer  books shall be
deemed to be closed for this purpose at the Effective Time.

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    IN  WITNESS  WHEREOF,  each  of   MidAmerican  and  Holdings,  pursuant   to
authorization  and approval given  by their respective  Boards of Directors, has
caused this  Agreement to  be executed  by  its President  and attested  by  its
Secretary as of the date first above written.

                                          MIDAMERICAN ENERGY COMPANY
                                          By ___________________________________
                                                         PRESIDENT

ATTEST
______________________________________
              SECRETARY

                                          MIDAMERICAN ENERGY HOLDINGS COMPANY
                                          By ___________________________________
                                                         PRESIDENT

ATTEST
______________________________________
              SECRETARY

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