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CORRESP
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      MidAmerican Energy Holdings - SEC Correspondence

October
      31, 2005

    VIA
      EDGAR
      AND FACSIMILE

    Mr.
      George F. Ohsiek, Jr.

    Branch
      Chief

    Division
      of Corporation Finance

    U.S.
      Securities and Exchange Commission

    450
      Fifth
      Street, N.W.

    Mail
      Stop
      3561

    Washington,
      D.C. 20549

              RE:

              MidAmerican
                Energy Holdings Company

              Form
                10-K for Fiscal Year Ended December 31, 2004

              Filed
                March 1, 2005

              Forms
                10-Q for Fiscal Quarters Ended

              March
                31, 2005 and June 30, 2005

              File
                No. 1-14881

              MidAmerican
                Funding LLC

              Form
                10-K for Fiscal Year Ended December 31, 2004

              Filed
                February 28, 2005

              Forms
                10-Q for Fiscal Quarters Ended

              March
                31, 2005 and June 30, 2005

              File
                No. 333-90553

              MidAmerican
                Energy Company

              Form
                10-K for Fiscal Year Ended December 31, 2004

              Filed
                February 28, 2005

              Forms
                10-Q for Fiscal Quarters Ended

              March
                31, 2005 and June 30, 2005

              File
                No. 333-15387

    Dear
      Mr.
      Ohsiek:

      This
        correspondence is being filed in response to the additional comment received
        from the staff of the U.S. Securities and Exchange Commission (the “Commission”)
        by letter dated October 17, 2005 (the “Comment”) with respect to
        MidAmerican Energy Holdings Company (“MEHC” or the “Company”), MidAmerican
        Funding LLC (“Funding”) and MidAmerican Energy Company (“MidAmerican Energy”)
        and their respective Forms 10-K for the fiscal year ended December 31,
        2004
        (the “Form 10-K”) and their respective Forms 10-Q for the fiscal quarters ended
        March 31, 2005 and June 30, 2005 (the “Form 10-Q”). The numbering
        below corresponds to the numbering of the Comment, which has been incorporated
        into this response letter in italics.

          1

      MidAmerican
        Energy Holdings Company

      Form
        10-K for Fiscal Year Ended December 31, 2004

      Note
        2. Summary of Significant Accounting Policies, page 63

                1.

                  Please
                    refer to comment 4 in our letter dated September 13, 2005 and
                    address the
                    following additional
                    comments:

      Comment
        - We note the capacity fees associated with the Upper Mahiao and Mahanagdong
        Projects are subject to semi-annual adjustments pursuant to changes in
        contractually specified price indices. Please tell us and revise to disclose
        the
        contractually specified price indices on which the adjustments are based.
        Also
        explain your consideration of whether this provision in the contracts represents
        an embedded derivative requiring separation from the host contract, as
        contemplated in paragraph 12 of SFAS 133.

      Response:
        The
        capacity fees associated with the Upper Mahiao and Mahanagdong Projects are
        subject to semi-annual adjustment based on movements in the Producer
        Price Index (line 63) of the United States country table of the International
        Financial Statistics published by the International Monetary Fund.

      Paragraph
        12 of SFAS 133 provides that an embedded derivative instrument shall be
        separated from the host contract and accounted for as a derivative instrument
        only if all of three specified criteria are met. The first criterion to be
        met
        is whether the economic characteristics and risks of the embedded derivative
        instrument are not clearly and closely related to the economic characteristics
        and risks of the host contract. Additional guidance on applying this criterion
        to various contracts containing embedded derivative instruments is included
        in
        Appendix A of SFAS 133. Paragraph 61(j) of Appendix A states that
        inflation-indexed adjustments for the use of leased assets are considered
        to be
        clearly and closely related to the economic characteristics of the host
        contract. Consequently, the inflation-related derivative embedded in an
        inflation-indexed lease contract would not be
        separated from the host contract. As the capacity fees are adjusted based
        upon a
        Producer Price Index, which is a measure of inflation, the Company determined
        that neither the Upper Mahiao nor the Mahanagdong Projects’ contracts contain an
        embedded derivative requiring separation from the host contract as contemplated
        in paragraph 12 of SFAS 133.

      The
        combined operating revenue of the Philippine Projects represented only 4.7%,
        5.5%, and 6.8% of MEHC’s consolidated operating revenue for the years ended
        December 31, 2004, 2003, and 2002, respectively, as detailed in Note
        23,
“Segment Information” in the Company’s Annual Report on Form 10-K for the year
        ended December 31, 2004. The Company respectfully acknowledges the comment
        and,
        in future annual filings, proposes updating its revenue recognition policy
        as
        follows (see Exhibit A for the complete disclosure):

        “Leyte
          Projects’ primary source of revenue is from capacity fees recognized on a
          straight-line basis over the cooperation periods and subject to semi-annual
          adjustment pursuant to changes in the United States producer price
          index.”

          2

      Comment
        - Explain in more detail how you determined to classify the Leyte and Casecnan
        projects/leases as operating, as opposed to sales-type leases. In particular,
        based on your reference to paragraph 8 of SFAS 13, we assume you concluded
        the
        leases do not represent real estate leases. Please tell us how you made this
        determination and, in this regard, whether you own the land underlying the
        facilities.

      Response:
        Although
        the Company does not own the land underlying the Leyte Projects’ nor the
        Casecnan Project’s (collectively, the “Philippine Projects”) facilities, the
        respective agreements are real estate leases as they involve real property
        as
        defined in paragraph 1 of SFAS 98. Furthermore, ownership of the individual
        Philippine Projects will be separately transferred, as single units, to its
        respective customer (the Philippine National Oil Company-Energy Development
        Corporation (“PNOC-EDC”) for the Leyte Projects and the Philippine National
        Irrigation Administration (“NIA”) for the Casecnan Project) at the end of the
        applicable cooperation period. The Leyte Projects have 10-year cooperation
        periods and the Casecnan Project has a 20-year cooperation period. Accordingly,
        criteria (a) of paragraph 7 of SFAS 13 was met.

      Pursuant
        to paragraph 6(b)(i) of SFAS 13 (as amended by paragraph 22.c. of SFAS 98),
        a
        lease involving real estate is to be classified as a sales-type lease only
        if it
        meets the criterion in paragraph 7(a), in which case the criteria in paragraph
        8
        do not apply. However, the fair values of the respective facilities were
        equal
        to their costs or carrying amounts at the inception of the respective project
        agreements and did not contain an element of manufacturer’s or dealer’s profit
        to the Company, and therefore, the project agreements could not be classified
        as
        sales-type leases and the criteria in paragraph 8 needed to be evaluated
        as
        required by paragraph 22(l)(ii) of SFAS 98. As more fully described in response
        to comment 4 in our letter dated September 27, 2005, the Company concluded,
        based upon the circumstances at the inception of the agreement, that the
        minimum
        lease payments were not reasonably predictable. Therefore, the criteria (a)
        of
        paragraph 8 were not met. This conclusion was based upon a number of factors
        including the dependence upon a single customer, the lack of operating history,
        the existence of significant operating uncertainties, and the existence of
        political, economic and other uncertainties associated with the Philippines.
        In
        the Company’s judgment, these circumstances, along with the length of the
        agreements (the Leyte Projects have 10-year cooperation periods and the Casecnan
        Project has a 20-year cooperation period) created “significant uncertainty”
        regarding the lease payments being reasonably predictable.

        The
          Company respectfully acknowledges the comment and, for the reasons discussed
          above, believes the project agreements of the Philippine Projects are properly
          classified as operating leases pursuant to the guidance set forth in paragraphs
          6-8 of SFAS 13.

        Comment
          - Given that you classified the projects/leases as operating leases due
          to
“significant uncertainty” regarding the collectibility/realizability of
          revenues, please tell us why you believe it is appropriate to record revenues
          under these projects/leases prior to collection. Refer, for example, to
          SAB
          Topic 13.A.1., which indicates that revenues are not considered realizable
          until
          collectibility is “reasonably assured.” To help us understand the inception to
          date difference between revenues recorded and amounts collected from your
          customers, please tell us the amount of billed and unbilled receivables
          under
          these particular contracts/leases, as well as the amount of any related
          reserves.

          3

      Response:
        As more
        fully described in response to comment 4 in our letter dated September 27,
        2005,
        the Company concluded, based upon the circumstances at the inception of the
        project agreements, that the minimum lease payments were not reasonably
        predictable. Therefore, the capital lease conditions were not met. This
        conclusion was based upon a number of factors including the dependence upon
        a
        single customer, the lack of operating history, the existence of significant
        operating uncertainties, and the existence of political, economic and other
        uncertainties associated with the Philippines. In the Company’s judgment, these
        circumstances, along with the length of the project agreements (the Leyte
        Projects have 10-year cooperation periods and the Casecnan Project has a
        20-year
        cooperation period) created “significant uncertainty” regarding the lease
        payments being reasonably predictable.

      In
        contrast, monthly billings for energy and water delivered are made to the
        Leyte
        Projects’ customer, PNOC-EDC, and the Casecnan Project’s customer, NIA, with
        payment terms of 30 days. The Company monitors the collections of amounts
        billed
        for energy and water delivered pursuant to the respective project agreements
        and
        provides an allowance for doubtful accounts as necessary. Therefore, the
        uncertainty that existed at the inception of the respective project agreements
        relative to collectibility of future payments (given the Leyte Projects have
        10-year cooperation periods and the Casecnan Project has a 20-year cooperation
        period) is significantly reduced relative to billed amounts that are due
        within
        30 days. Except for the amounts
        disputed by the
        PNOC-EDC
        and NIA, as more fully described in our September 27, 2005 letter,
        the
        amounts due for energy and water delivered have been paid timely by PNOC-EDC
        and
        NIA. Combined bad debt expense was $0.0 million, $10.0 million, and $11.5
        million for the years ended December 31, 2004, 2003, and 2002,
        respectively, at the Philippine Projects. The bad debt expense recognized
        in the
        years ended December 31, 2003 and 2002 resulted from NIA disputing
        certain
        contractual elements of the water delivery fee. The dispute was resolved
        in
        October 2003 with the execution of a supplemental agreement which clarified
        such
        contractual elements. As of December 31, 2004, the combined billed
        receivables outstanding, unbilled receivables outstanding, and the amount
        of
        related reserves recorded at the Philippine Projects were $45.5 million,
        $0.0 million and $0.8 million, respectively. As of December 31,
        2003, the combined billed receivables outstanding, unbilled receivables
        outstanding, and the amount of related reserves recorded at the Philippine
        Projects were $48.3 million, $0.0 million and $2.0 million,
        respectively.

        Revenue
          under the agreements has been recognized only in circumstances where the
          Company
          believed collection of billed amounts was reasonably assured pursuant to
          ARB 43,
          Chapter 1A, paragraph 1. However, as discussed in paragraph 22 of SFAS
          5,
          conditions under which receivables exist usually involve some degree of
          uncertainty about their collectibility, in which case a contingency exists.
          Accordingly, in circumstances where the Company determined that it was
          probable
          that it would be unable to collect all amounts outstanding due to the existence
          of disputes or other circumstances, an allowance for doubtful accounts
          was
          recognized.

        The
          Company respectfully acknowledges the comment and, for the reasons discussed
          above, believes it is appropriate to record revenues from the project agreements
          of the Philippine Projects prior to collection.

          4

      Comment
        - Expand your proposed revenue recognition disclosure to explain why the
        Leyte
        and Casecnan projects/leases are classified as operating leases, despite
        the
        fact that ownership of the facilities under lease transfers to the customer
        at
        the end of the respective cooperation periods.

      Response:
        The
        Company respectfully acknowledges the comment and in future annual filings
        proposes to disclose in its revenue recognition policy note that the project
        agreements were classified as operating leases due to the significant
        uncertainties that existed at the inception of the leases regarding both
        the
        collection of future amounts and the amount of unreimbursable costs yet to
        be
        incurred as follows (see Exhibit A for the complete disclosure):

      “The
        project agreements were classified as operating leases due to significant
        uncertainties that existed at the inception of the leases regarding both
        the
        collection of future amounts and the amount of unreimbursable costs yet to
        be
        incurred mainly due to the existence of political, economic and other
        uncertainties as