September 28, 2000

Mr. David L. Sokol
Chairman and CEO
MidAmerican Energy Holdings Company
P.O. Box 657
Des Moines, Iowa 50303-0657

Dear Mr. Sokol:

We read with interest and concern the enclosed September 19, 2000, memorandum prepared by the staff of the Securities and Exchange Commission (SEC) describing potential problems with your company’s legislative proposal to repeal the Public Utility Holding Company Act of 1935 (PUHCA).

As you know, PUHCA was enacted to put an end to widespread utility abuses which had harmed both investors and consumers. Any repeal of this important statute should be accomplished in a manner that will not open the door to a resurrection of that unfortunate era.

The SEC memorandum states that the MidAmerican proposal "is not based on effective state regulation or other circumstances suggesting that the historical abuses identified in section 1 of the Act are unlikely to recur." The memorandum states that the PUHCA exemption proposed by MidAmerican "would permit transactions and practices that could adversely affect investors and consumers," and sets forth several specific examples. Finally, the memorandum indicates the MidAmerican proposal "could unnecessarily complicate relationships between utilities and states commissions" and "appears to offer significant administrative difficulties" for the SEC.

If accurate, SEC staff’s concerns suggest that the MidAmerican proposal is seriously flawed. We would have to vigorously oppose any proposal that harmed investors and consumers.

Given the short time remaining in the Congressional session and the long-standing controversy concerning the PUHCA repeal effort, it will be difficult to find consensus on the novel approach MidAmerican has proposed this year. Of course, it is imperative that any PUHCA repeal bill be advanced by the normal legislative process, including committee hearings and markups. Any effort to move this proposal by means other than regular legislative order would raise serious procedural concerns and jeopardize any prospect of its enactment.

However, we are interested in understanding MidAmerican’s PUHCA repeal proposal and request that you provide a detailed written response to the each of the concerns and examples set forth in the SEC staff memorandum. In light of the short period of time before Congress is expected to adjourn for the year, we request that you respond by Thursday, October 5, 2000.

Sincerely,

 Enclosure