Document:

<PAGE>

                                                                   EXHIBIT 10.10

                                 LEASE AGREEMENT

                                   Dated as of

                               September 29, 2000

                                     between

                        AMEREN ENERGY GENERATING COMPANY

                                     LESSOR

                                       and

                        AMEREN ENERGY DEVELOPMENT COMPANY

                                     LESSEE
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                               TABLE OF CONTENTS
                               -----------------

<TABLE>
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                                                                            Page
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<S>                                                                         <C>
1.   Lease................................................................     1
     -----

2.   Term.................................................................     1
     ----

3.   Rent.................................................................     1
     ----

4.   Use..................................................................     2
     ---

5.   Delivery.............................................................     2
     --------

6.   Inspection and Information...........................................     2
     --------------------------

7.   Maintenance and Repair...............................................     2
     ----------------------

8.   Insurance............................................................     3
     ---------

9.   Return of Equipment..................................................     4
     -------------------

10.  Taxes................................................................     4
     -----

11.  Liens, Encumbrances and Rights of Others.............................     5
     ----------------------------------------

12.  Lessor's Payment.....................................................     6
     ----------------

13.  Warranties and Covenants of Lessor...................................     6
     ----------------------------------

14.  Indemnity............................................................     6
     ---------

15.  Default..............................................................     7
     -------

16.  Assignment by Lessor and Lessee......................................     8
     -------------------------------

17.  Lessee's Representations and Warranties..............................     9
     ---------------------------------------

18.  Nature of Lessee's Obligations.......................................     9
     ------------------------------

19.  Renewal..............................................................    10
     -------

20.  Identification.......................................................    11
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21.  Further Assurances...................................................    11
     ------------------

22.  Notices..............................................................    11
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23.  Miscellaneous........................................................    12
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</TABLE>

                                      (i)
<PAGE>

                                LEASE AGREEMENT

THIS LEASE AGREEMENT ("Lease"), dated as of this 29th day of September, 2000, by
and between Ameren Energy Generating Company, an Illinois corporation
("Lessor"), and Ameren Energy Development Company, an Illinois corporation
("Lessee").

                             W I T N E S S E T H:

     1.   Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from
          -----
Lessor, three (3) simple cycle natural gas combustion turbine power plants and
certain related equipment (herein collectively called the "Equipment") described
in Schedule A attached hereto and incorporated herein by reference.

     2.   Term. The term of this Lease shall commence on September 29, 2000, and
          ----
shall continue for a term ending on September 30, 2015 (the "Term"), unless
earlier terminated pursuant to the terms of this Lease, or unless extended for a
renewal term or terms in accordance with Section 19 hereof. The term of this
Lease, commencing on September 29, 2000 and ending September 30, 2015, is herein
called the "Basic Term."

     3.   Rent. Subject to the terms and conditions of this Lease, Lessee hereby
          ----
agrees to pay Lessor rent for the Equipment throughout the Term of this Lease,
payable to Lessor in arrears in monthly installments of the Payment Amounts set
forth in the table below, with the first payment becoming due and payable on
October 1, 2000, and each successive payment due on the first day of each month.
The Payment Amount shall vary by year in accordance with the following schedule.

               Year                        Payment Amount ($)
               ----
                                           (monthly payment amounts)
                                           -------------------------

               2000                              $806,000
               2001                              $818,000
               2002                              $831,000
               2003                              $843,000
               2004                              $856,000
               2005                              $869,000
               2006                              $882,000
               2007                              $895,000
               2008                              $908,000
               2009                              $922,000
               2010                              $936,000
               2011                              $950,000
               2012                              $964,000
               2013                              $979,000
               2014                              $993,000
               2015                            $1,008,000
<PAGE>

Unless otherwise instructed in writing by Lessor, all rent payments under this
Section, and any additional payments hereunder, are to be made in immediately
available funds and are to be paid to Lessor electronically in accordance with
written instructions to be provided by Lessor.

     4.   Use. Lessee will cause the Equipment to be operated in accordance with
          ---
sound utility practice, by competent and duly qualified personnel only, in
accordance with the original manufacturer's recommendations, and in accordance
with applicable governmental regulations, if any. Lessee will use the Equipment
for business purposes only and will not change the location of the Equipment
from the plant site of Midwest Electric Power, Inc. located near Joppa, Illinois
("Facility") without the prior written consent of Lessor.

     5.   Delivery. Lessee hereby represents, warrants and confirms to Lessor
          --------
that the Equipment covered by this Lease has been duly delivered by Lessor to
the Facility, and that the Equipment is accepted by Lessee and Lessee releases
Lessor from all defects, vices or lack of fitness for use, whether or not
discoverable as of the date hereof, and that the Equipment is free and clear of
all liens, encumbrances and rights of others whatsoever, except for Permitted
Liens (as defined in Section 11 hereof), provided, however, that nothing
                                         --------  -------
contained in this Lease shall in any way diminish or otherwise affect any right
Lessee or Lessor may have with respect to the Equipment against the seller or
any manufacturer of, or the installer of, the Equipment or any part thereof.

     6.   Inspection and Information. Lessee agrees that Lessor or its
          --------------------------
authorized representatives may at all reasonable times inspect the Equipment and
the books and records of Lessee relative thereto, but that Lessor shall have no
duty to make any such inspection and shall incur no liability by reason of not
making the same. In order to conduct the inspections provided for in this
Section, Lessee shall provide Lessor and its representatives with reasonable
access to the Facility and Lessee's premises. In order to insure access to the
Facility, Lessee shall cause the owner of the Facility to provide Lessor an
easement, in form acceptable to Lessor.

     7.   Maintenance and Repair.
          ----------------------

     (a)  Lessee, at its own expense, will keep and maintain, or cause to be
kept and maintained, the Equipment in good operating condition, and will provide
all maintenance and service and make all repairs necessary for such purpose. In
addition, if any parts or accessories forming part of the Equipment shall from
time to time become worn out, lost, destroyed, damaged beyond repair or
otherwise permanently rendered unfit for use, Lessee, at its own expense, will
within a reasonable time replace such parts or accessories, or cause the same to
be replaced, by replacement parts or accessories which are free and clear of all
liens, encumbrances or rights of others and have a value and utility at least
equal to the parts or accessories replaced. All replacement parts and
accessories shall immediately become the property of Lessor and part of the
Equipment for all purposes hereof; but the parts or accessories replaced thereby
shall no longer be the property of Lessor. Lessee may also, from time to time,
add further parts or accessories to the Equipment, provided that such addition
does not impair the value or utility of the Equipment; and any parts or
accessories so added to such item of Equipment, if not required to be added as a
replacement as above provided, shall remain the property of Lessee or other
owner thereof and may be removed by Lessee at any time prior to the expiration
of this Lease, provided such removal does not impair the value, utility or
ability to operate the Equipment (as

                                      -2-
<PAGE>

would have been the case, if such addition had not been made) and no Event of
Default hereunder shall then have occurred and be continuing. Any parts or
accessories not removed from the Equipment within a reasonable time after the
expiration or earlier termination of this Lease, shall become the property of
Lessor.

     (b)  Pursuant to its power supply agreement with Ameren Energy Marketing
Company executed as of the date hereof, Lessee is required to establish a
separate reserve account to be used for actual major maintenance expenditures on
the Equipment. The parties agree that this account, and any similar arrangements
with other power supply customers relating to maintenance of the Equipment,
shall be established at a bank or other financial institution acceptable to both
parties. Upon a failure by Lessee to fulfill its maintenance obligations as
provided for in this Agreement, Lessor may draw upon this account(s) in order to
perform any required maintenance, although it is under no obligation to do so.

     8.   Insurance. Lessee will cause to be carried and maintained on the
          ---------
Equipment, at its own cost and expense, insurance in such amounts, against such
risks, in such form and with such insurance companies, and underwriters that are
licensed to do business in the State of Illinois and have an A.M. Best rating of
"A" or better as Lessee would, in the prudent management of its properties,
maintain or cause to be maintained with respect to similar equipment owned by
it; provided, however, that the amount of property damage insurance in effect
    --------  -------
for the Equipment, from time to time, shall in no event be less than the
replacement value of the Equipment as of the immediately preceding rent payment
date. All insurance policies (including liability policies) shall name Lessor
and Lessee, as additional insureds on a primary and non-contributory basis and
provide for payment to Lessor regardless of any breach by Lessee of any
warranty, declaration or condition in such insurance policies. Unless Lessor
shall otherwise agree in writing, each liability policy shall provide for all
losses to be paid on behalf of Lessor and Lessee, as their interests may appear
and each property damage policy shall provide for all losses to be payable to
Lessee and Lessor as their respective interests may appear. With respect to
proceeds received under property damage policies, any such proceeds resulting
from a loss other than an actual or constructive total loss of the Equipment
will be applied, in payment for repairs or for replacement property, in
accordance with the terms of Section 7 hereof, if not already paid for by
Lessee, and will be paid to Lessee if Lessee has already paid for repairs or for
replacement property. Lessee will cause each insurer under a policy required by
the terms of this Section 8 to agree (either by endorsement upon such policy or
by letter addressed to Lessor) to give Lessor at least 30 days' prior written
notice of any alteration, materially adverse to the interests of the Lessor, in
the terms of such policy, or of the cancellation thereof in whole or in part.
Lessee agrees to provide to Lessor, upon Lessor's request, copies of all
insurance policies relating to the Equipment.

Lessee agrees to furnish to Lessor, on the date hereof and on or before each
anniversary date hereof during the Term, a report signed by an independent
insurance broker, appointed by Lessee and acceptable to Lessor, stating that (1)
in the opinion of said insurance broker the insurance carried and maintained by
Lessee on the Equipment fully complies with the provisions of this Section 8 and
(2) identifying the insurance carriers with which such insurance has been
placed, concisely describing the terms of the respective insurance policies
placed with such insurance carriers, and stating that, in his or her opinion,
such insurance carriers are reputable, financially responsible and fully able to
perform their responsibilities under such insurance policies;

                                      -3-
<PAGE>

Lessee also agrees (A) to notify Lessor in writing of any change in the identity
of any insurance carrier hereunder within 30 days of such change; and (B) within
30 days of receipt by Lessee from Lessor of written notice (which notice may be
given at any time by Lessor) to the effect that a named insurance carrier is not
acceptable to Lessor due to the risk of insolvency or restrictive governmental
action, to take such action as may be necessary to place the insurance provided
by such unacceptable carrier with an alternate insurance carrier and thereafter
to notify Lessor in writing of the change of insurance carriers so affected in
accordance with clause (A) above.

     9.   Return of Equipment. Upon the expiration or earlier termination of
          -------------------
this Lease or upon the exercise of the remedy specified in paragraph (a) of
Section 15 hereof, Lessee, at its own expense, will, if Lessor so requests,
completely disconnect the Equipment from Lessee's system which will be done, at
Lessor's option, by Lessee or by a third party mutually agreed upon by both
parties. In addition, Lessee shall take such action as may be necessary or
desirable to prepare the Equipment for removal and shipment and return the
Equipment forthwith to Lessor by whichever of the following means Lessor may
specify: (i) the delivery of the Equipment at Lessee's premises, (ii) the
delivery of the Equipment at such other location as Lessor shall designate which
is reasonably convenient to Lessor and Lessee or (iii) the loading of the
Equipment on board such common carrier as Lessor shall specify and the shipping
of the Equipment, freight collect (except where an Event of Default shall have
occurred and be continuing, in which case, freight will be paid by Lessee) to
such destination as Lessor may designate. Upon any such return of the Equipment,
Lessee agrees that there will be removed from such Equipment any name or other
identification of Lessee thereon and that such Equipment will be in the same
condition as when delivered to Lessee hereunder (except for such dismantling as
may be necessary for removal and shipment and for ordinary wear and tear) and
free and clear of all liens, encumbrances or rights of others whatsoever except
Permitted Liens (as defined in Section 11 hereof).

     10.  Taxes. Lessee agrees to pay, and to indemnify and hold Lessor,
          -----
harmless from all license and registration fees and all taxes, levies, imposts,
duties, charges or withholdings of any nature whatsoever (together with any
penalties, fines or interest thereon) incurred during the term of this Lease and
imposed against the Lessor, Lessee, or the Equipment by any federal, state or
local government or taxing authority upon, or with respect to, the Equipment or
any portion thereof or any interest therein, or upon the purchase, ownership,
delivery, leasing, possession, use, operation, return or other disposition
thereof, or upon the rentals, receipts or earnings arising therefrom or upon or
with respect to this Lease; provided that the foregoing indemnity shall not
                            --------
apply to any of the following taxes imposed on Lessor by the Federal government
or by any state or subdivision thereof; (i) any tax measured by the net income
of Lessor from the leasing of the Equipment or from the sale, exchange or other
disposition of the Equipment prior to any Event of Default under this Lease
Agreement, or (ii) any tax on or measured by any fees or compensation received
by Lessor for services rendered in connection with the transactions contemplated
hereby.

If a claim is made against Lessor for any such tax or other imposition with
respect to which the Lessee is liable for a payment or indemnity hereunder, the
Lessor shall, within thirty (30) days, give the Lessee notice, in writing, of
such claim. If reasonably requested by the Lessee, in writing, Lessor, at the
Lessee's expense, shall, in good faith, contest in the name of the Lessee or

                                      -4-
<PAGE>

Lessor, the validity, applicability or amount of such tax or other imposition by
(i) resisting payment thereof if practicable, (ii) not paying the same except
under protest, if protest is necessary and proper, and (iii) if the payment be
made, using reasonable efforts to obtain a refund thereof in appropriate
administrative and judicial proceedings; provided, that Lessor shall not be
                                         --------
required to take any action pursuant to this sentence unless and until it shall
have received from the Lessee a bond or other indemnity satisfactory to it
(including, without limitation, indemnification for all costs, expenses, losses,
legal and accounting fees and disbursements, penalties and interest) and shall
have determined that the action to be taken will not result in the sale,
forfeiture or loss of the Equipment, any part thereof or any interest therein.
If Lessor shall obtain a refund of any tax or other imposition fairly
attributable to any amount paid by the Lessee, pursuant to this Section 10,
Lessor shall not be deemed to be in default under any of the indemnification
provisions of this Section 10, so long as it (or Lessor, as provided above) is
diligently prosecuting any contest referred to herein. In case any report or
return is required to be made with respect to any obligation of Lessee under
this Section 10 or arising out of this Section 10, Lessee will either make such
report or return to Lessor or will notify Lessor of such requirement and make
such report or return in such manner as shall be satisfactory to Lessor.

All amounts payable by Lessee, pursuant to this Section 10, shall be payable, to
the extent not theretofore paid, on written demand by the party entitled to
indemnification unless, and only to the extent that, any such tax, levy, impost,
duty, charge or withholding is being contested in good faith and by appropriate
proceedings so long as such proceedings do not involve any danger of the sale,
forfeiture or loss of the Equipment, any portion thereof or any interest
therein. All the indemnities contained in this Section 10 shall continue in full
force and effect, notwithstanding the expiration or other termination of this
Lease and are expressly made for the benefit of, and shall be enforceable by,
Lessor and its respective successors, assigns, agents and servants.

     11.  Liens, Encumbrances and Rights of Others. Lessee will not directly or
          ----------------------------------------
indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien,
attachment, charge, encumbrance or right of others whatsoever on or with respect
to any Equipment, title thereto or any interest therein, except (i) the
respective rights of Lessor and Lessee as herein provided, (ii) liens or
encumbrances which result from claims against Lessor not related to the
ownership of the Equipment, (iii) liens for taxes either not yet due or being
contested in good faith and by appropriate proceedings and (iv) inchoate
materialmen's, mechanics', workmen's, repairmen's or employees' liens or other
like liens arising in the ordinary course of business and securing obligations
which are not delinquent (the liens described in clauses (i) through (iv) of
this Section 11 being herein called "Permitted Liens"). Lessee will promptly
notify Lessor, in writing, and will promptly, at Lessee's expense, cause any
such mortgage, pledge, lien, attachment, charge, encumbrance or right of others
not excepted above which may arise at any time to be duly discharged, dismissed,
removed or bonded in a manner satisfactory to Lessor as soon as possible, but in
any event, within thirty (30) days after the existence of the same shall have
first become known to Lessee.

     12.  Lessor's Payment. If Lessee fails to make any payment of rent required
          ----------------
to be made by it hereunder or fails to perform or comply with any of its
agreements contained herein, Lessor may itself make such payment or perform or
comply with such agreement, and the amount of such payment and the amount of the
reasonable expenses of Lessor incurred in connection with such payment or the
performance of or compliance with such agreement, as the case may be,

                                      -5-
<PAGE>

together with interest thereon at a rate of 1 1/2 percent per month, shall be
deemed additional rent, payable by Lessee upon demand, but Lessor shall have no
obligation to pay any rent or to perform or comply with any of Lessee's
agreements.

     13.  Warranties and Covenants of Lessor. LESSOR HAS NOT MADE OR SHALL BE
          ----------------------------------
DEEMED TO MAKE OR HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
AS TO THE TITLE, CONDITION, DESIGN, OPERATION OR FITNESS FOR USE OF THE
EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE EQUIPMENT. None of the provisions of this Section
13 or another provision of this Lease shall be deemed to amend, modify or
otherwise affect the representations, warranties or other obligations of the
seller, or any refurbisher of, any manufacturer of, or the installer of, any
part of the Equipment. Lessor hereby assigns or otherwise makes available to
Lessee such rights as Lessor may have under any warranty made by the seller or
any manufacturer of, or the installer of, any item of Equipment, provided
however, that such rights shall automatically revert to Lessor upon the
occurrence and during the continuance of an Event of Default or upon the return
of the Equipment to Lessor under Section 9 hereof. Lessor hereby covenants that,
so long as the Lessee makes timely payments of rent and fully performs all
obligations hereunder, Lessor shall not hinder or interfere with Lessee's
peaceable and quiet enjoyment of the possession and use of the Equipment.

     14.  Indemnity. Lessee does hereby assume liability for, and does hereby
          ---------
agree to indemnify, protect, save and keep harmless Lessor, and its respective
successors, assigns, agents and servants from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements (including legal fees and expenses) of
whatsoever kind and nature which may be imposed on, incurred by or asserted at
any time (whether before, after or during the term of, this Lease) against
Lessor, and in any way relating to or arising out of this Lease or the delivery,
non-delivery, possession, use, operation, leasing, subleasing, condition,
maintenance, repair, sale, return or other disposition of all or any part of the
Equipment in accordance with the terms of this Lease (including, without
limitation, any claim as the result of latent and other defects, whether or not
discoverable by Lessor or Lessee, and any claim for patent, trademark or
copyright infringement), except only that Lessee shall not be required to
indemnify any such party for loss or liability resulting from the gross
negligence or willful misconduct of or violation of law by such party or to
indemnify any other person for loss or liability resulting from the action or
inaction of Lessor or any other recipient of rental payments made by Lessee
under this Lease in failing properly to apply rental payments made by Lessee.
The obligations of Lessee under this Section 14 shall survive the expiration or
earlier termination of this Lease.

     15.  Default. The following events shall constitute events of default
          -------
(herein called "Events of Default") hereunder: (i) within ten (10) days after
the same shall become due, Lessee shall fail to make any payment of rent or
additional rent due hereunder; or (ii) Lessee shall fail to make any other
payment or perform or observe any other covenant, condition or agreement to be
performed or observed by it hereunder, and such failure shall continue
unremedied for a period of twenty (20) days after written notice thereof by
Lessor; or (iii) any representation or warranty made by Lessee herein or in any
document or certificate furnished Lessor in connection herewith or pursuant
hereto shall prove to have been incorrect when made in any material respect;
(iv)

                                      -6-
<PAGE>

failure to provide a report signed by an independent insurance broker in the
form and with the required content and conclusion required by Section 8 of this
Agreement; (v) a default by Lessee under the Power Supply Agreement dated as of
the date hereof between Lessee and Ameren Energy Marketing Company or any other
power supply agreement involving the sale of electricity generated by the
Equipment, or (vi) Lessee shall become insolvent or bankrupt or make an
assignment for the benefit of creditors or consent to the appointment of a
trustee or receiver; or a trustee or a receiver shall be appointed for Lessee or
for a substantial part of its property without its consent and shall not be
dismissed for a period of thirty (30) days, or bankruptcy, reorganization or
insolvency proceedings shall be instituted by or against Lessee and, if
instituted against Lessee, shall not be dismissed for a period of thirty (30)
days. Upon the occurrence of any Event of Default and at any time thereafter, so
long as the same shall be continuing, Lessor may, at its option, declare this
Lease to be in default, and will give notice of such declaration of default to
the Lessee, and at any time thereafter, so long as Lessee shall not have
remedied all outstanding Events of Default, Lessor may do one or more of the
following with respect to any or all of the Equipment as Lessor in its sole
discretion shall elect, to the extent permitted by, and subject to compliance
with any mandatory requirements of, applicable law then in effect:

     (a)  cause Lessee, upon the written demand of Lessor and at Lessee's
expense, to promptly return any or all Equipment to Lessor at the location in
the condition and otherwise in accordance with all of the terms of Section 9
hereof, or Lessor, at its option, may enter upon the premises where such
Equipment is located and take immediate possession of and remove such Equipment
by summary proceedings or otherwise, all without liability for or by reason of
such entry or taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise, unless such damage to property was
due to the gross negligence or willful misconduct of Lessor or Lessor's agent;

     (b)  sell any or all of the Equipment at public or private sale and with or
without notice to Lessee or advertisement, as Lessor may determine, or otherwise
dispose of, hold, use, operate, lease to others or keep idle any or all of the
Equipment as Lessor in its sole discretion may determine, all free and clear of
any rights of Lessee and without any duty to account to Lessee with respect to
such action or inaction or for any proceeds with respect thereto, except to the
extent required by paragraph (d) below, in the event Lessor elects to exercise
its rights under said paragraph in lieu of its rights under paragraph (c) below;

     (c)  in the event Lessor, pursuant to paragraph (b) above, shall have sold
any or all of the Equipment, Lessor may, if it shall so elect, cause Lessee to
pay Lessor, as liquidated damages for loss of a bargain and not as a penalty,
any unpaid rent due, up to but not including the rent payment date (or the date
which would have been such rent payment date, but for the termination of this
Lease) next following the date of such sale, together with interest at the rate
of twelve percent (12%) per annum on said amount from the date of such sale,
until the date of actual payment.

     (d)  Lessor may exercise any other right or remedy which may be available
to it under applicable law or proceed by appropriate court action to enforce the
terms hereof or to recover damages for the breach hereof or to rescind this
Lease as to any or all Equipment; and/or

                                      -7-
<PAGE>

In addition, Lessee shall be liable for any and all unpaid additional rent due
hereunder before, after or during the exercise of any of the foregoing remedies
and for all legal fees and other costs and expenses incurred by reason of the
occurrence of any Event of Default or the exercise of Lessor's remedies with
respect thereto, including all costs and expenses incurred in connection with
the return of any Equipment in accordance with the terms of Section 9 hereof or
in placing such Equipment in the condition required by said Section. At any sale
of Equipment, pursuant to this Section, Lessor may bid for and purchase such
Equipment. Except as otherwise expressly provided above, no remedy referred to
in this Section is intended to be exclusive, but each shall be cumulative, and,
in addition to any other remedy referred to above or otherwise available to
Lessor at law or in equity; and the exercise or beginning of exercise by Lessor
of any one or more of such remedies shall not preclude the simultaneous or later
exercise by Lessor, of any or all such other remedies. No express or implied
waiver by Lessor of any Event of Default shall in any way be, or be construed to
be, a waiver of any future or subsequent Event of Default. To the extent
permitted by applicable law, Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise which may require Lessor to sell, lease or
otherwise use any Equipment in mitigation of Lessor's damages as set forth in
this Section or which may otherwise limit or modify any of Lessor's rights or
remedies under this Section.

     16.  Assignment by Lessor and Lessee. Without the prior written consent of
          -------------------------------
Lessor, Lessee will not assign any of its rights hereunder, sublet any Equipment
or otherwise permit any Equipment to be operated or used by, or in the
possession of, anyone but Lessee; provided, however, that Lessee may enter into
an agreement with Midwest Electric Power, Inc. to operate and maintain the
Equipment provided the form of the agreement and any amendments thereto are
approved by Lessor. Lessor may assign this Lease and any of its rights and
obligations hereunder at any time without the consent of Lessee.

     17.  Lessee's Representations and Warranties. Lessee represents and
          ---------------------------------------
warrants that: (i) Lessee is a corporation duly organized and existing in good
standing under the laws of the State of Illinois and is duly qualified to do
business wherever necessary to carry on its present business and operations and
to perform its obligations under this Lease; (ii) this Lease, (A) has been duly
authorized by all necessary corporate action on the part of Lessee and does not
require any stockholder approval, (B) does not contravene any law binding on
Lessee or contravene Lessee's certificate of incorporation or by-laws and (C)
does not constitute a violation by Lessee of, or result in any default by Lessee
under, any indenture, credit agreement or other contractual agreement to which
Lessee is a party or by which it is bound; (iii) neither the execution and
delivery by Lessee of this Lease nor any of the actions contemplated to be taken
by the Lessee at any time hereunder or thereunder require the consent or
approval of, or the giving of notice to, any federal, state or foreign
governmental authority, except with respect to appropriate action by (A) the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935 and (B) by the Illinois Commerce Commission; and appropriate actions
(sufficient to permit Lessee to engage, without further regulatory
authorization, in any and all transactions which this Lease contemplates may be
undertaken by Lessee) have been taken by such agencies and are in full force and
effect; (iv) this Lease constitutes legal, valid and binding obligations of
Lessee, enforceable against Lessee, in accordance with the respective terms
hereof and thereof, subject to all applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the rights of creditors and
lessors generally and subject to general equitable principles which may limit
the right to obtain the remedy of specific performance, hereunder or thereunder;

                                      -8-
<PAGE>

(v) there are no pending or threatened actions or proceedings in which Lessee is
named as a party before any court or administrative agency which, in the
reasonable opinion of Lessee's management, might result in any material adverse
effect on Lessee's financial condition or operations.

     18.  Nature of Lessee's Obligations. Lessee hereby agrees that, except as
          ------------------------------
herein provided, Lessee's obligation to pay rent and other amounts shall be
absolute and unconditional under all circumstances, including, without
limitation, the following circumstances: (i) any set-off, counterclaim,
recoupment, defense (other than payment) or other right which Lessee may have
against Lessor (with the exception stated in clause (iv) of this Section 18),
the manufacturer, a contractor or anyone else for any reason whatsoever; (ii)
any defect in the condition, design, operation or fitness for use of any
Equipment or the existence of any liens, encumbrances or rights of others
whatsoever with respect to such Equipment, whether or not resulting from claims
against Lessor not related to the ownership of such Equipment (with the
exception stated in clause (iv) of this Section 18); (iii) any damage to or loss
or destruction of any Equipment; or (iv) any interruption or cessation in the
use or possession thereof by Lessee for any reason whatsoever, except in the
case where such interruption or cessation is the direct result of action by
Lessor in violation of Lessor's covenant under Section 13 hereof with respect to
Lessee's quiet enjoyment of the possession and use of the Equipment; or (v) any
insolvency, bankruptcy, reorganization or similar proceedings by or against
Lessee; or (vi) any other event or circumstances whatsoever, whether or not
similar to any of the foregoing. To the extent permitted by applicable law,
Lessee hereby waives any and all rights which it may now have or which, at any
time hereafter, may be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender the lease of any Equipment hereof, except in
accordance with the express terms hereof. Each rent or other payment made by
Lessee hereunder shall be final and Lessee will not seek to recover all or any
part of such payment from Lessor, for any reason whatsoever.

     19.  Renewal.
          -------

     (a)  If fair market rental value has been determined pursuant to paragraph
(b) of this Section 19 as of the end of the Basic Term, or if a right to renew
has been exercised, as of the end of the then current renewal term, and if no
Event of Default (or other event, which, after lapse of time or notice or both,
would become an Event of Default) shall have occurred and be continuing and this
Lease shall not have been earlier terminated, Lessee shall be entitled, at its
option, upon written notice to Lessor at least six (6) months prior to the
expiration of such term to renew this Lease for a new renewal term of five (5)
years commencing at the expiration of such term, in which case all of the
provisions of this Lease shall be applicable during the new renewal term, except
that rent payable during the new renewal term shall be the fair market rental
value of the Equipment as of the end of such current term; provided, however,
                                                           --------  -------
that Lessee has no right to renew this Lease after the Basic Term for more than
two (2) consecutive five-year renewal terms.

     (b)  Not more than two (2) years nor less than one (1) year prior to the
expiration of the Basic Term or, if the Lessee has renewed the Lease as provided
in paragraph (a) of this Section 19, the current renewal term, Lessee may notify
Lessor, in writing, that Lessee desires a determination of the fair market
rental value of the Equipment as of the end of such term (except

                                      -9-
<PAGE>

that no determination of fair market rental value shall be made as of the end of
the second renewal term.) Thereafter, Lessor and Lessee shall consult for the
purpose of determining the fair market rental value of the Equipment as of the
end of such term, and any values agreed upon, in writing, shall constitute such
fair market rental value for the purposes of this Section 19. If Lessor and
Lessee fail to agree, Lessee may deliver to Lessor a notice requesting that the
value be determined by a qualified independent appraiser appointed by mutual
agreement. If a single appraiser shall have been appointed by mutual agreement,
his determination of value shall be final. If no such appraiser is so appointed
within ten (10) business days after such notice is given, Lessor and Lessee
shall each appoint an independent appraiser within fifteen (15) business days
after such notice is given, and the two (2) appraisers so appointed shall,
within twenty (20) business days after such appointment, appoint a third
independent appraiser. If no such third appraiser is appointed within twenty
(20) business days after such notice is given, either party may apply to any
court having jurisdiction to make such appointment, and both parties shall be
bound by any appointment made by such court. The appraisers so appointed shall
be instructed to determine the fair market rental value of the Equipment within
thirty (30) days after their appointment. The values determined by the three (3)
appraisers shall be averaged, the determination which differs most from such
average shall be excluded, the remaining two (2) determinations shall be
averaged and such average shall be final. For purposes of this Section 19 and
the computation of fair market rental value under Section 19 hereof, such fair
market rental value shall be determined on the basis of, and shall be equal in
amount to, the value which would obtain in an arm's-length transaction between
an informed and willing lessee (including a lessee currently in possession or a
used equipment or scrap dealer) and an informed and willing lessor under no
compulsion to lease and, in such determination, costs of removal from the
location of current use shall not be a deduction from such value. Lessee's
request for a determination of fair market rental value shall not obligate
Lessee to exercise any of the options provided in this Section but, whether or
not any of such options is exercised, Lessee shall pay all costs and expenses of
any appraisal pursuant to this paragraph (b).

     20.  Identification. Lessee agrees to place and maintain on each item of
          --------------
Equipment insignia, plates or other identification of a size reasonably
acceptable to Lessor and in a conspicuous place reasonably satisfactory to
Lessor, showing Lessor as owner-lessor.

     21.  Further Assurances. Lessee will promptly and duly execute and deliver
          ------------------
to Lessor such further documents and assurances and take such further action as
Lessor may, from time to time, request in order to more effectively carry out
the intent and purpose hereof and to establish and protect the rights, interests
and remedies created, or intended to be created, in favor of Lessor hereby,
including, without limitation, (i) the taking of any action necessary or
appropriate to permit the Lessor to have access to the Equipment for the purpose
of carrying out any of the provisions hereof, (ii) the filing or recording of
this Lease (or any supplement or amendment hereto), or a financing or
continuation statement with respect hereto or thereto, in accordance with the
laws of any applicable jurisdictions and (iii) the taking of such further action
as Lessor may deem desirable to fully protect Lessor's interest hereunder in
accordance with the Uniform Commercial Code or other applicable law. Lessee
hereby authorizes Lessor to effect any such filing or recording as aforesaid
(including the filing of any such financing statements without the signature of
Lessee), and, at the option of Lessor, Lessor's costs and expenses with respect
thereto shall constitute additional rent, payable on demand.

                                      -10-
<PAGE>

     22.  Notices. All notices and other communications required hereunder shall
          -------
be in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail, return receipt requested, or sent by telecopy with
receipt confirmed by telephone, to the parties at the following addresses or to
such other addresses as a party may from time to time notify the other parties.

                   (i)   If to Ameren Energy Generating Company, to:

                         Gary L. Rainwater
                         President
                         Ameren Energy Generating Company
                         One Ameren Plaza
                         1901 Chouteau Avenue
                         St. Louis, MO 63103
                         Telephone: (314)-554-4965
                         Fax: (314)-554-3066

                   (ii)  If to Ameren Energy Development Company, to:

                         R. Alan Kelley
                         Vice President
                         Ameren Energy Development Company
                         One Ameren Plaza
                         1901 Chouteau Avenue
                         St. Louis, MO 63103
                         Telephone: (314) 554-2849
                         Fax: (314) 554-2800

     23.  Miscellaneous. Any provision of this Lease which is prohibited or
          -------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, Lessee hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect. No term or provision of this Lease may be changed,
waived, discharged or terminated orally, but only by an instrument, in writing,
signed by the party against which the enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof shall be
effective only in the specific instance and for the specific purpose given. This
Lease shall constitute an agreement of lease, and nothing herein shall be
construed as conveying to Lessee any right, title or interest in any Equipment,
except as a lessee only. The captions in this Lease are for convenience of
reference only and shall not define or limit the terms or provisions hereof.
This Lease shall, in all respects, be governed by, and construed in accordance
with, the laws of the State of Illinois, including all matters of construction,
validity and performance. Notwithstanding any provision hereof to the contrary,
any payment pursuant to this Lease, due on a day which is not a Business Day,
may be paid by Lessee on the next day which is a Business Day without interest
on that payment for the period from such due date to such date of payment;
"Business Day," as used in this sentence, shall mean any day other than a day on
which

                                      -11-
<PAGE>

banking institutions in the City of New York are authorized or required by law
or executive order to remain closed.

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be duly executed
by their duly authorized officers or representatives as of the day and year
first above written.

                                         LESSOR:

                                         AMEREN ENERGY GENERATING COMPANY

                                         By: /s/ Gary L. Rainwater
                                             ----------------------------------
                                             Gary L. Rainwater, President

                                         LESSEE:

                                         AMEREN ENERGY DEVELOPMENT COMPANY

                                         By: /s/ Robert C. Porter
                                             ----------------------------------
                                             Robert C. Porter, Vice President

                                      -12-
<PAGE>

                                  SCHEDULE A

The following Equipment is included in this Agreement:

Combustion Turbine engines - GE model 7001B, serial numbers 237974, 237975,
237976
Generators - General Electric, serial numbers 335X126, 335X127, 335X128
Associated inlet structures
Associated inlet and exhaust structures
Associated gas conditioning equipment
Associated step-up transformers
Associated spare parts
Associated control equipment and instrumentation
Other miscellaneous Equipment that is associated exclusively with any or all of
the above turbines or generators and that is not identified below.

The following property and materials are specifically excluded from the Lease.
These items are owned by Midwest Electric Power, Inc. ("Midwest") and it is
anticipated that Lessee will be provided access to these items pursuant to an
operating and maintenance agreement to be executed between Midwest and Lessee.

Gas heating equipment
Gas metering equipment
Gas compression equipment
Station service transformers
Station service buildings
Process and fire water equipment
The site transmission bus
Land and landscaping
Fencing
Site lighting
Underground piping, cable and conduits<PAGE>

                            MIDAMERICAN FUNDING, LLC

                                       and

                              THE BANK OF NEW YORK
                                   as Trustee

                      [___]% Senior Secured Notes due 2011

                          Second Supplemental Indenture

                           Dated as of March __, 2001

<PAGE>

     SECOND SUPPLEMENTAL INDENTURE, dated as of March __, 2001 (herein called
the "Second Supplemental Indenture"), between MIDAMERICAN FUNDING, LLC, an Iowa
limited liability company (hereinafter called the "Company"), and THE BANK OF
NEW YORK, a banking corporation organized under the laws of the state of New
York, as successor Trustee (hereinafter called the "Trustee") to IBJ Whitehall
Bank & Trust Company under the Original Indenture referred to below.

                                   WITNESSETH:

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture dated as of March 11, 1999 (hereinafter called the "Original
Indenture"), as supplemented by the First Supplemental Indenture dated as of
March 11, 1999, to provide for the issuance from time to time of its secured
debentures, notes or other evidences of indebtedness, the form and terms of
which are to be established as set forth in Sections 201 and 301 of the Original
Indenture;

     WHEREAS, Section 901 of the Original Indenture provides, among other
things, that the Company and the Trustee may enter into indentures supplemental
to the Original Indenture for, among other things, the purpose of establishing
the form and terms of the Securities of any series as permitted in Sections 201
and 301 of the Original Indenture and of appointing an Authenticating Agent with
respect to the Securities of any series;

     WHEREAS, the Company desires to create one series of notes in an aggregate
principal amount of two hundred million dollars ($200,000,000) to be designated
the "[___]% Senior Secured Notes due 2011", (the "Securities"), and all action
on the part of the Company necessary to authorize the issuance of the Securities
under the Original Indenture and this Second Supplemental Indenture has been
duly taken; and

     WHEREAS, all acts and things necessary to make the Securities, when
executed by the Company and authenticated and delivered by the Trustee as
provided in the Original Indenture, the valid and binding obligations of the
Company and to constitute these presents a valid and binding supplemental
indenture and agreement according to its terms, have been done and performed.

     NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

     That in consideration of the premises and of the acceptance and purchase of
the Securities by the holders thereof and of the acceptance of this trust by the
Trustee, the Company covenants and agrees with the Trustee, for the equal
benefit of holders of the Securities, as follows:

                                    ARTICLE I
                                   DEFINITIONS

     The use of the terms and expressions herein is in accordance with the
definitions, uses and constructions contained in the Original Indenture and the
form of Security attached hereto as Exhibit A.

                                       1
<PAGE>

                                   ARTICLE II
                      TERMS AND ISSUANCE OF THE SECURITIES

     Section 201. Issue of Securities. One series of bonds, which shall be
designated the "[___]% Senior Secured Notes due 2011", shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, the terms, conditions and covenants of the Original
Indenture and this Second Supplemental Indenture (including the form of Security
set forth in Exhibit A). The aggregate principal amount of the [___]% Senior
Secured Notes due 2011 which may be authenticated and delivered under the Second
Supplemental Indenture shall not exceed $200,000,000.

     Section 202. Optional Redemption. The Securities may be redeemed, in whole
or in part, at the option of the Company pursuant to the terms set forth in
paragraph 2 of the Securities to be redeemed. The provisions of Article XI of
the Original Indenture shall also apply to any optional redemption of Securities
by the Company.

     Section 203. Limitation on Liens. The covenant provided by Section 1004 of
the Original Indenture shall be applicable to the Securities.

     Section 204. Limitation on Distributions. The covenant provided by Section
1005 of the Original Indenture shall be applicable to the Securities.

     Section 205. Limitation on Indebtedness of the Company. The covenant
provided by Section 1006 of the Original Indenture shall be applicable to the
Securities.

     Section 206. Place of Payment. The Place of Payment in respect of the
Securities will be in The City of New York, initially at the Corporate Trust
Office of The Bank of New York (which as of the date hereof is located at 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust
Administration.

     Section 207. Form of Securities; Incorporation of Terms. The form of the
Securities shall be substantially in the form of Exhibit A, the terms of which
are herein incorporated by reference and which are part of this Second
Supplemental Indenture. The Securities shall be issued as one or more Global
Securities in fully registered form and one or more Definitive Securities in
fully registered form, as determined in accordance with Section 201 of the
Original Indenture. The Global Securities shall be delivered by the Trustee to
the Depositary, as the Holder thereof, or a nominee or custodian therefor, to be
held by the Depositary in accordance with the Original Indenture.

     Section 208. Exchange of the Global Securities. Each of the Global
Securities shall be exchangeable for Definitive Securities only as provided in
Section 307(b)(ii) of the Original Indenture.

     Section 209. Regular Record Date for the Securities. The Regular Record
Date for the Securities shall be the February 15 or August 15 immediately prior
to each Interest Payment Date.

                                       2
<PAGE>

     Section 210. Authorized Denominations. Beneficial interests in Global
Securities, as well as Definitive Securities, may be held only in denominations
of $1,000 and integral multiples of $1,000 in excess thereof.

                                  ARTICLE III
                                  DEPOSITARY

     Section 301. Depositary. The Depository Trust Company, its nominees and
their respective successors are hereby appointed Depositary with respect to the
Global Securities.

                                   ARTICLE IV
                                  MISCELLANEOUS

     Section 401. Execution as Supplemental Indenture. This Second Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Original Indenture and, as provided in the Original Indenture, this Second
Supplemental Indenture forms a part thereof.

     Section 402. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.

     Section 403. Successors and Assigns. All covenants and agreements in this
Second Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.

     Section 404. Separability Clause. In case any provision in this Second
Supplemental Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     Section 405. Benefits of Second Supplemental Indenture. Nothing in this
Second Supplemental Indenture or in the Securities, express or implied, shall
give to any person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Second Supplemental Indenture.

     Section 406. Execution and Counterparts. This Second Supplemental Indenture
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute but one and
the same instrument.

     Section 407. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Second Supplemental
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of the Securities or the proceeds thereof.

                            [SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>

     IN WITNESS WHEREOF, the parties hereof have caused this Second Supplemental
Indenture to be duly executed by their respective officers or directors duly
authorized thereto, all as of the day and year first above written.

                                       MIDAMERICAN FUNDING, LLC

                                       By:
                                           ---------------------------------
                                           Name:
                                           Title:

                                       THE BANK OF NEW YORK,
                                       as Trustee

                                       By:
                                           ---------------------------------
                                           Name:
                                           Title:

                                       4
<PAGE>

                                                                       EXHIBIT A
                      FORM OF SENIOR SECURED NOTE DUE 2011

                      FACE OF SENIOR SECURED NOTE DUE 2011

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS HELD BY THE DEPOSITORY TRUST COMPANY (THE
"DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES HELD BY A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY BE MADE
EXCEPT IN LIMITED CIRCUMSTANCES.

         UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY (AS DEFINED HEREIN) OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEFINITIVE SECURITY
IS ISSUED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &
CO., OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

<PAGE>

                            MIDAMERICAN FUNDING, LLC
                      [___]% Senior Secured Notes due 2011

No. 1                                                         $200,000,000

                                                              CUSIP No. [______]

         MIDAMERICAN FUNDING, LLC., a limited liability company organized under
the laws of Iowa (herein called the "Company," which term includes any successor
corporation or limited liability company under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal amount of Two Hundred Million Dollars (such
principal amount, as it may from time to time be adjusted by endorsement on
Schedule A hereto, is hereinafter referred to as the "Principal Amount") on
March 1, 2011, and to pay interest thereon from March [__], 2001 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on March 1 and September 1 in each year, commencing
September 1, 2001, at the rate of [___]% per annum, until the Principal Amount
hereof is paid or made available for payment; provided that any Principal Amount
and premium, and any such installment of interest, which is overdue shall
continue to bear interest at the aforesaid rate of [___]% per annum (to the
extent that the payment of such interest shall be legally enforceable) from the
dates such amounts are due until they are paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the February 15 or August 15 (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date. Any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Person in whose name this Security (or one or more
Predecessor Securities) is registered on such Regular Record Date and may be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.

         Payment of the principal of (and premium, if any) and interest on this
Security shall be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, or at such
additional offices or agencies as the Company from time to time may designate
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts,
provided, however, that, at the option of the Company, payment of the interest
on this Security may be made only upon presentation and surrender hereof at any
such office or agency and, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register. Payment of interest, if any, in
respect of this

                                      A-2
<PAGE>

Security may also be made, in the case of a Holder of at least U.S. $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. Dollar
account maintained by the Holder with a bank in the United States; provided that
such Holder elects payment by wire transfer by giving written notice to the
Trustee or Paying Agent to such effect designating such account no later than 15
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      A-3
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                       MIDAMERICAN FUNDING, LLC

                                       By:
                                           ---------------------------------
                                           Name:
                                           Title:

                                       Attest:

                                       By:
                                           ---------------------------------
                                           Name:
                                           Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.

                                                  THE BANK OF NEW YORK,
                                                    as Trustee

                                                  By:
                                                     --------------------------
                                                     Authorized Signatory

Dated:
      --------------------

                                      A-4
<PAGE>

                     REVERSE OF SENIOR SECURED NOTE DUE 2011

                            MIDAMERICAN FUNDING, LLC
                      [____]% Senior Secured Notes due 2011

1. General

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of March 11, 1999 (herein called the
"Original Indenture"), between the Company and The Bank of New York (as
successor to IBJ Whitehall Bank & Trust Company) as trustee (herein called the
"Trustee," which term includes any successor trustee under the Original
Indenture), as supplemented by the First Supplemental Indenture, dated as of
March 11, 1999, and the Second Supplemental Indenture, dated as of March [__],
2001 (together with the Original Indenture, the "Indenture") between the Company
and the Trustee, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. Terms defined in the Indenture which are
not defined herein are used with the meanings assigned to them in the Indenture.
This Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $200,000,000.

2. Optional Redemption

         The Securities of this series will be redeemable in whole or in part,
at the option of the Company at any time, at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Securities of this series
being redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal of and interest on the Securities of this series being
redeemed discounted to the Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at a discount rate equal to the
Treasury Yield plus [__] basis points, plus, for (i) or (ii) above, whichever is
applicable, accrued interest on the Securities of this series to the Redemption
Date.

         "Treasury Yield" means, with respect to any Redemption Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date.

         "Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities of this series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities of this series.

                                      A-5
<PAGE>

         "Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day in New York City preceding such Redemption Date, as set forth in
the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations
for U.S. Government Securities" or (ii) if such release (or any successor
release) is not published or does not contain such prices on such Business Day,
the Reference Treasury Dealer Quotation for such Redemption Date.

         "Independent Investment Banker" means an investment banking institution
of international standing appointed by the Company.

         "Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City appointed by the Company.

         "Reference Treasury Dealer Quotation" means, with respect to the
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount and quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day in New York City preceding such Redemption Date).

         Notice of redemption pursuant to this paragraph 2 shall be given as
provided for in the Indenture not less than 30 days nor more than 60 days prior
to the Redemption Date.

         If fewer than all the Securities of this series are to be redeemed,
selection of Securities of this series for redemption will be made by the
Trustee in any manner the Trustee deems fair and appropriate.

         The Trustee may conclusively rely on an Officers' Certificate setting
forth the calculation of the Redemption Price, which Officers' Certificate shall
be delivered to the Trustee prior to the Redemption Date.

         Unless the Company defaults in payment of the Redemption Price, from
and after the Redemption Date, the Securities of this series or portions thereof
called for redemption will cease to bear interest, and the Holders thereof will
have no right in respect of such Securities of this series except the right to
receive the Redemption Price thereof.

         In the event of redemption of this Security in part only, the Trustee
will reduce the Principal Amount hereof by endorsement on Schedule A hereto such
that the Principal Amount shown on Schedule A after such endorsement will
reflect only the unredeemed portion hereof.

3. Defeasance

         The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.

                                      A-6
<PAGE>

4. Defaults and Remedies

         If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. At any time after such declaration of acceleration with respect to
Securities of this series has been made, but before a judgment or decree for
payment of money has been obtained by the Trustee as provided in the Indenture,
if all Events of Default with respect to Securities of this series have been
cured or waived (other than the non-payment of principal of the Securities of
this series which has become due solely by reason of such declaration of
acceleration) then and in every such case, the Holders of a majority in
aggregate principal amount of the Outstanding Securities under the Indenture
may, by written notice to the Company and to the Trustee, rescind and annul such
declaration and its consequences on behalf of all of the Holders, but no such
recision or annulment shall extend to or affect any subsequent default or impair
any right consequent thereon.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless (a) such
Holder shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities, (b) the Holders of not less
than 33% or a majority, as applicable, in principal amount of the Securities at
the time Outstanding under the Indenture shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee,
(c) such Holder shall have offered the Trustee indemnity satisfactory to the
Trustee against the costs, expenses and liabilities to be incurred in compliance
with such request, (d) the Trustee shall not have received from the Holders of a
majority in principal amount of Securities at the time Outstanding under the
Indenture a direction inconsistent with such request and (e) the Trustee for 90
days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such proceeding. The foregoing shall not apply to
certain suits described in the Indenture, including any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates expressed
herein.

5. Amendment and Waiver

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the Indenture or any supplemental
indenture or the rights and obligations of the Company and rights of the Holders
of the Securities of any series at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor on in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

                                      A-7
<PAGE>

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest, if any, on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.

6. Transfer and Exchange; Denominations

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, (which initially shall be the corporate trust office of the Trustee), duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, shall be issued to the designated transferee or transferees.

         The Securities of this series are issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination as requested by the Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

7. Successor Obligors

         When a successor assumes all the obligations of its predecessor under
the Securities of this series and the Indenture in accordance with the terms of
the Indenture, the predecessor will be released from those obligations.

8. Trustee Dealings with the Company

         The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities of this series and may
otherwise deal with the Company, its Subsidiaries or their respective Affiliates
as if it were not the Trustee.

9. No Recourse Against Others

         No stockholder, director, officer, employee, incorporator or Affiliate
of the Company shall have any liability for any obligation of the Company under
the Securities of this series or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of
the Securities of this series by accepting a Security of this series waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities of this series.

                                      A-8
<PAGE>

10. Authentication

         This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.

11. CUSIP Numbers

         Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities of this series as a convenience to the Holders of the
Securities of this series.

12. Governing Law

         This Security shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the principles of
conflict of laws thereof.

13. Defined Terms

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

                                      A-9
<PAGE>

                                   SCHEDULE A

                             SCHEDULE OF ADJUSTMENTS

Initial Principal Amount:    U.S. $200,000,000

                                                                Notation made
                                               Principal        on behalf of
Date           Principal        Principal      Amount           the Security
adjustment     Amount           Amount         following        Exchange
made           increase         decrease       adjustment       Agent/Registrar
----------     ---------        ---------      -------------    ---------------

                                      A-10

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