MidAmerican Energy Holdings Company and American Electric Power Agree to Form Joint Venture Company to Build High-Voltage Electric Transmission in Texas.

DES MOINES, Iowa -- MidAmerican Energy Holdings Company and American Electric Power have entered into a memorandum of understanding to develop a joint venture company for the purpose of building, owning and operating high-voltage electric transmission assets in the state of Texas.

The memorandum of understanding contemplates that equity ownership of the joint venture will be split evenly between the two companies. Initially, AEP would contribute Texas transmission assets currently under construction, and a MidAmerican Energy Holdings Company subsidiary would make a cash contribution to the joint venture company. Subject to completion of operating and service agreements by the end of 2006 and approval of regulatory filings in 2007, the companies anticipate up to $1 billion of projects could be included in the new company over the next several years.

"We are pleased to join forces with a high-quality partner to make a significant investment in transmission infrastructure in the state of Texas," said David Sokol, chairman and chief executive officer of MidAmerican Energy Holdings Company. "The increase in transmission capacity in Texas will support continued reliable electric service delivery, enhance the efficiency of the wholesale electric market and encourage the development of renewable generation in the state."

Customers of MidAmerican Energy Company, which supplies regulated electric service to 706,000 electric customers in Iowa, Illinois and South Dakota, will not be affected by this transaction.

MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms - PacifiCorp, MidAmerican Energy Company, CE Electric UK, Kern River Gas Transmission Company, Northern Natural Gas Company and CalEnergy - MidAmerican provides electric and natural gas service to more than 6.7 million customers worldwide. Information on MidAmerican is available on the Internet at www.midamerican.com.