Patrick J. Goodman
Welcome to the
MidAmerican Energy Holdings Company
2009 Fixed-Income Investor Conference
Senior Vice President and Chief Financial Officer
Forward-Looking Statements
This report contains statements that do not directly or exclusively relate to historical facts. These statements are “forward-
looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
can typically be identified by the use of forward-looking words, such as “may,” “could,” “project,” “believe,” “anticipate,”
“expect,” “estimate,” “continue,” “intend,” “potential,” “plan,” “forecast” and similar terms. These statements are based upon
MidAmerican Energy Holdings Company’s (“MEHC”) and its subsidiaries’ (collectively, the “Company”) current intentions,
assumptions, expectations and beliefs and are subject to risks, uncertainties and other important factors. Many of these factors
are outside the Company’s control and could cause actual results to differ materially from those expressed or implied by the
Company’s forward-looking statements. These factors include, among others:
looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
can typically be identified by the use of forward-looking words, such as “may,” “could,” “project,” “believe,” “anticipate,”
“expect,” “estimate,” “continue,” “intend,” “potential,” “plan,” “forecast” and similar terms. These statements are based upon
MidAmerican Energy Holdings Company’s (“MEHC”) and its subsidiaries’ (collectively, the “Company”) current intentions,
assumptions, expectations and beliefs and are subject to risks, uncertainties and other important factors. Many of these factors
are outside the Company’s control and could cause actual results to differ materially from those expressed or implied by the
Company’s forward-looking statements. These factors include, among others:
– general economic, political and business conditions in the jurisdictions in which the Company’s facilities operate;
– changes in governmental, legislative or regulatory requirements affecting the Company or the electric or natural gas
utility, pipeline or power generation industries;
utility, pipeline or power generation industries;
– changes in, and compliance with, environmental laws, regulations, decisions and policies that could increase operating
and capital improvement costs, reduce plant output or delay plant construction;
and capital improvement costs, reduce plant output or delay plant construction;
– the outcome of general rate cases and other proceedings conducted by regulatory commissions or other governmental and
legal bodies;
legal bodies;
– changes in economic, industry or weather conditions, as well as demographic trends, that could affect customer growth
and usage or supply of electricity and natural gas or the Company’s ability to obtain long-term contracts with customers;
and usage or supply of electricity and natural gas or the Company’s ability to obtain long-term contracts with customers;
– a high degree of variance between actual and forecasted load and prices that could impact the hedging strategy and costs
to balance electricity and load supply;
to balance electricity and load supply;
– changes in prices and availability for both purchases and sales of wholesale electricity, coal, natural gas, other fuel sources
and fuel transportation that could have a significant impact on generation capacity and energy costs;
and fuel transportation that could have a significant impact on generation capacity and energy costs;
– the financial condition and creditworthiness of the Company’s significant customers and suppliers;
– changes in business strategy or development plans;
– availability, terms and deployment of capital, including severe reductions in demand for investment-grade commercial
paper, debt securities and other sources of debt financing and volatility in the London Interbank Offered Rate, the base
interest rate for the Company’s credit facilities;
paper, debt securities and other sources of debt financing and volatility in the London Interbank Offered Rate, the base
interest rate for the Company’s credit facilities;
Forward-Looking Statements
– changes in MEHC’s and its subsidiaries’ credit ratings;
– performance of the Company’s generating facilities, including unscheduled outages or repairs;
– risks relating to nuclear generation;
– the impact of derivative instruments used to mitigate or manage volume, price and interest rate risk, including increased
collateral requirements, and changes in commodity prices, interest rates and other conditions that affect the value of the
derivatives;
collateral requirements, and changes in commodity prices, interest rates and other conditions that affect the value of the
derivatives;
– the impact of increases in healthcare costs and changes in interest rates, mortality, morbidity, investment performance
and legislation on pension and other post-retirement benefits expense and funding requirements;
and legislation on pension and other post-retirement benefits expense and funding requirements;
– changes in the residential real estate brokerage and mortgage industries that could affect brokerage transaction levels;
– unanticipated construction delays, changes in costs, receipt of required permits and authorizations, ability to fund capital
projects and other factors that could affect future generating facilities and infrastructure additions;
projects and other factors that could affect future generating facilities and infrastructure additions;
– the impact of new accounting pronouncements or changes in current accounting estimates and assumptions on financial
results;
results;
– the Company’s ability to successfully integrate future acquired operations into its business;
– other risks or unforeseen events, including litigation and wars, the effects of terrorism, embargoes and other catastrophic
events; and
events; and
– other business or investment considerations that may be disclosed from time to time in MEHC’s filings with the United
States Securities and Exchange Commission (the “SEC”) or in other publicly disseminated written documents.
States Securities and Exchange Commission (the “SEC”) or in other publicly disseminated written documents.
Further details of the potential risks and uncertainties affecting the Company are described in MEHC’s filings with the SEC,
including Item 1A and other discussions contained in Form 10-K. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The
foregoing review of factors should not be construed as exclusive.
including Item 1A and other discussions contained in Form 10-K. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The
foregoing review of factors should not be construed as exclusive.
Gregory E. Abel
2009 Fixed-Income Investor Conference
President and Chief Executive Officer
MidAmerican Energy Holdings Company
___________________________
(1) Net owned MW in operation and under
construction per MidAmerican Energy
Holdings Company December 31, 2008,
Form 10-K
construction per MidAmerican Energy
Holdings Company December 31, 2008,
Form 10-K
REVENUES $12.7 billion
ASSETS $41.4 billion
CUSTOMERS
Electric: 6.2 million
Natural Gas: 0.7 million
EMPLOYEES 16,800
NATURAL GAS TRANSMISSION
PIPELINE DESIGN CAPACITY
7.0 billion cubic feet per day
GENERATION CAPACITY
17,915 megawatts(1)
NONCARBON GENERATION
More than 4,100 megawatts(1)
23% of total generation capacity
• Own and operate high-quality, asset-based businesses
– Customer service, employee commitment, environmental respect,
regulatory integrity, operational excellence and financial strength
regulatory integrity, operational excellence and financial strength
• Identify internal growth opportunities
– Expand the moat: renewable generation, transmission assets, pipeline
infrastructure, electric distribution systems
infrastructure, electric distribution systems
• Pursue industry acquisitions
Plan Execute Measure Correct
Balanced Outcomes Sustainability
• Why were we interested in Constellation Energy acquisition?
– 8,700 MW owned generation - 6,700 MW base load (five nuclear plants totaling
3,869 MW)
3,869 MW)
– Baltimore Gas & Electric - 1.2 million electric and 646,000 natural gas customers
• Constellation Energy merger termination
– Disciplined approach to original offer
– Protected MEHC through termination provisions ($1.1 billion of consideration)
• Acquisition opportunities
– Owner of choice
• Diversified portfolio of regulated assets
– Weather, customer, regulatory, generation, economic and catastrophic risk diversity
• Berkshire Hathaway provides MEHC with a $3.5 billion equity commitment
– Access to capital even in times of utility and general market stress
• No other utility has this quality of explicit financial support
• No dividend requirement
– Cash flow is retained in the business and used to help fund growth and improve credit
metrics
metrics
• Berkshire ownership
– Access to capital from Berkshire allows us to take advantage of market opportunities
– Berkshire is a long-term holder of assets, and its never sell philosophy promotes
stability and helps make us the buyer of choice among regulators
stability and helps make us the buyer of choice among regulators
Patrick J. Goodman
2009 Fixed-Income Investor Conference
Senior Vice President and Chief Financial Officer
MidAmerican Energy Holdings Company
Income from Continuing Operations
Shareholders’ Equity
Property, Plant and Equipment (Net)
Cash Flow from Operations
5-Yr. CAGR = 22.1%
5-Yr. CAGR = 16.3%
5-Yr. CAGR = 29.5%
5-Yr. CAGR = 20.5%
$1,850
(1)
___________________________
(1) $646 after-tax gain is related to the termination fee and profit from
investment in Constellation Energy; 5-Yr. CAGR calculation excludes
this amount.
investment in Constellation Energy; 5-Yr. CAGR calculation excludes
this amount.
• Diversification of revenue sources reduces regulatory concentrations
• In 2008, 97% of EBITDA came from investment grade subsidiaries
Consolidated EBITDA(2): $4.0 Billion
MEHC 2008 (1)
___________________________
(1) Includes regulated utilities, pipelines, Casecnan and Cordova revenue only. Excludes equity income from CalEnergy
and HomeServices, which has operations in 19 states and adds further diversification
(2) EBITDA represents operating income plus depreciation and amortization
MEHC 2008
Energy Revenue: $11.5 Billion
Projected Capital Expenditures
Long-Term Debt Maturities(1)
($ in millions)
• PacifiCorp issued $1 billion in January 2009
• MidAmerican Energy Company depending on growth
opportunities
opportunities
• Yorkshire Electricity Distribution plc to support distribution
business growth
business growth
• Project Financing
– Geothermal plants in Imperial Valley, California, for potential
expansion
expansion
– Kern River expansions
• MEHC depending on growth opportunities
Questions
2009 Fixed-Income Investor Conference
Richard Walje
President - - Rocky Mountain Power
9
Overview
___________________________
(1) Net owned MW in operation and under construction per
MidAmerican Energy Holdings Company December 31, 2008,
Form 10-K
MidAmerican Energy Holdings Company December 31, 2008,
Form 10-K
• Headquartered in Portland, Oregon
• 6,596 employees
• 1.7 million electricity customers
• 10,425 net MW generation
capacity(1)
capacity(1)
• Generating capacity by fuel type(1)
– Coal 59%
– Natural gas 21%
– Hydro 11%
– Wind and geothermal 9%
CA
NV
AZ
UT
OR
WA
MT
CO
ID
Pacific Power service territory
Rocky Mountain Power
service territory
service territory
Coal plants
Natural gas plants
Geothermal and other
Coal mines
Hydro systems
Wind plants
WY
• Successfully completed the Wasatch Front automated meter reading
project. The project saves the company $5.4 million annually and
reduces headcount by 95 people. A similar project is underway in
Casper, Wyoming
project. The project saves the company $5.4 million annually and
reduces headcount by 95 people. A similar project is underway in
Casper, Wyoming
• Deployed technology to improve customer service and reduce costs,
such as the automated outage customer call-back program and the
customer secure Web login. While customer calls have increased
11% in the last five years, service levels have improved from 81% to
85% with the same number of call center agents
such as the automated outage customer call-back program and the
customer secure Web login. While customer calls have increased
11% in the last five years, service levels have improved from 81% to
85% with the same number of call center agents
• Network reliability has improved significantly since 2006, with the
system average interruption duration index improving by 22% and
the system average interruption frequency index improving by 16%
system average interruption duration index improving by 22% and
the system average interruption frequency index improving by 16%
Rocky Mountain Power service territory
• Bad debt expense increased from $4.1 million in 2007 to $6.1 million in 2008 and is forecasted at
$6.3 million for 2009. Receivables aging trend is only slightly unfavorable, with $7.5 million over 90
days at 2/28/09 compared to $7.0 million over 90 days at 2/29/08. Processes have improved to predict
exposure
$6.3 million for 2009. Receivables aging trend is only slightly unfavorable, with $7.5 million over 90
days at 2/28/09 compared to $7.0 million over 90 days at 2/29/08. Processes have improved to predict
exposure
• Retail load in 2008 was 35,380 GWh, a 3% increase over 2007. Load is anticipated to decrease 1.3% in
2009 and then increase 2.1% in 2010
2009 and then increase 2.1% in 2010
• Utah
– 2007 rate case order resulted in $39 million increase effective October 2008. The largest reductions
from the filed case came from test year and cost of capital rulings. As a result, a project was
initiated:
from the filed case came from test year and cost of capital rulings. As a result, a project was
initiated:
• Communication and legislative plan created
• Legal petitions and regulatory filings submitted
• Aligned Utah costs with the recovery received
• Legislation was passed (SB 75) providing the public service commission with new tools
– A settlement has been reached in the current 2008 rate case for a $45 million increase (4%)
effective May 2009
effective May 2009
• Includes the 8.4% cost-of-capital settlement approved by the commission, reflecting 10.6% return on
equity and 6.0% cost of long-term debt
equity and 6.0% cost of long-term debt
• Wyoming
– Rate case settlement reached for $18 million increase (4%) effective May 2009
– Power Cost Adjustment Mechanism implemented and effective, preliminary increase of $7 million
• Idaho
– Rate case settled for $4 million increase (3%) effective April 2009
• Utah SB 75 (passed) - clarifies the authority of the Utah Public Service
Commission to make certain decisions, such as creating an energy balancing
account or granting recovery of major plant additions, and authorizes the
commission to approve an Energy Cost Adjustment Mechanism
Commission to make certain decisions, such as creating an energy balancing
account or granting recovery of major plant additions, and authorizes the
commission to approve an Energy Cost Adjustment Mechanism
• Utah SB 41 (passed) - establishes a notification process for public utilities before
construction of a transmission line, which should expedite the permitting process
construction of a transmission line, which should expedite the permitting process
• Wyoming HB 288 (passed) - allows permitting of transmission lines to be
completed in segments, as opposed to the entire line
completed in segments, as opposed to the entire line
• Idaho SB 1123 (passed) - authorizes a utility to request and the commission to
establish binding ratemaking principles for new generation and transmission
establish binding ratemaking principles for new generation and transmission
• Idaho SB 1143 (defeated) - attempted to increase the amount of time required to
process a rate change request by two months
process a rate change request by two months
• Given the economic downturn, Rocky Mountain Power has identified
revenue and savings opportunities in 2009, including:
revenue and savings opportunities in 2009, including:
– Implement automated meter reading in Casper, Wyoming, and review other
opportunities
opportunities
– Continue to review staffing and only fill critical positions
– Achieve favorable rate case settlement outcomes
– Re-prioritize capital spending due to load reductions
– Increase focus on energy efficiency and demand-reduction plans
– Increase customer awareness of the programs and resources available to reduce
customer account write-offs
customer account write-offs
2009 Fixed-Income Investor Conference
Pat Reiten
President - - Pacific Power
• Rate case settlements with fair revenue results -
Washington, Oregon and California
Washington, Oregon and California
• Significant progress in the Energy Gateway
Transmission Expansion; construction has begun
Transmission Expansion; construction has begun
• Settlement agreement in principle of the Klamath
hydroelectric relicensing process
hydroelectric relicensing process
• Signed contracts with two major employee unions
• 22% reduction in OSHA recordable incidents
• Initiated six-state enhanced customer
communication campaign
communication campaign
Pacific Power service territory
• Retail load was 18,639 GWh in 2008 vs. 18,840 GWh in 2007, a 1.0% decrease,
and is anticipated to decrease 2.6% from 2008 to 2010
and is anticipated to decrease 2.6% from 2008 to 2010
• Bad debt expense was $8.6 million in 2008 vs. $5.0 million in 2007
• Receivables aging trend is only slightly unfavorable, with $4.9 million over
90 days at 2/28/09 compared to $4.4 million over 90 days at 2/29/08
90 days at 2/28/09 compared to $4.4 million over 90 days at 2/29/08
• Taking action regarding customers and carefully managing risks, including
investment, credit, customer debt and load forecasts
investment, credit, customer debt and load forecasts
- Monitor all key customers; deposits and prompt payments required
- Communicate through quarterly meetings, regional customer conferences,
key account services and outreach targeting economically stressed
key account services and outreach targeting economically stressed
• Managing costs, identifying savings and operating at 2005 run rates
- Carefully review staffing requirements
- Impress contract and spending discipline
- Engage employees
• Oregon
– Power costs update increase of $9 million effective January 1, 2009, through
Transition Adjustment Mechanism
Transition Adjustment Mechanism
– In November 2008, Oregon Public Utility Commission approved a $31 million
revenue increase for the Renewable Adjustment Clause Mechanism to permit timely
recovery of costs to implement Oregon’s Renewable Portfolio Standard between rate
cases
revenue increase for the Renewable Adjustment Clause Mechanism to permit timely
recovery of costs to implement Oregon’s Renewable Portfolio Standard between rate
cases
• Washington
– Washington Utilities and Transportation Commission authorized $20 million annual
increase effective October 15, 2008
increase effective October 15, 2008
– In February 2009, filed a general rate case for an annual increase of $39 million
• California
– Energy cost adjustment and Post Test-Year Mechanism for attrition resulted in
$3 million rate increase effective January 1, 2009
$3 million rate increase effective January 1, 2009
– In February 2009, filed Post Test-Year Adjustment Mechanism for major capital
additions, resulting in a rate adjustment of $1 million effective March 2009
additions, resulting in a rate adjustment of $1 million effective March 2009
• Highlights
– Line miles: ~2,000
– Communities: 100+
– Existing substations: 15
– New substations: 5
– Conductor: 150M+ pounds
– Steel: ~340,000 tons
– Construction resources: 800-1,000
– PacifiCorp investment: ~$6 billion
– In-service dates: 2010-2018
• Customer benefits
– Improves reliability on critical Path C link
– Improves transfer capability for import and export
– Provides delivery mechanism for future resources
• Key facts
– Overall project cost - $880 million
• Engineer/Procure/Construct contract - $582 million
• In-service date - December 2010
– Construction
• 135 miles of double circuit 345-kV lines
• 100 miles of right of way
• 800+ structures, 600 ft. of elevation change
• Three soil types - rock, farmland, swamp
• 130 mph microburst wind conditions
2009 Fixed-Income Investor Conference
Rob Lasich
President - - PacifiCorp Energy
10,425 net MW generation capacity(1)
• 6,104 MW coal-fueled generation
• 2,214 MW gas-fueled generation
• 2,085 MW renewables
– 1,158 MW hydroelectric
– 893 MW wind
– 34 MW geothermal
• 22 MW other
___________________________
(1) Net owned MW in operation and under construction per MidAmerican Energy
Holdings Company December 31, 2008, Form 10-K
Holdings Company December 31, 2008, Form 10-K
CA
NV
AZ
UT
OR
WA
MT
CO
ID
Pacific Power service territory
Rocky Mountain Power
service territory
service territory
Coal plants
Natural gas plants
Geothermal and other
Coal mines
Hydro systems
Wind plants
WY
March 31, 2006
December 31, 2008
___________________________
(1) Net owned MW in operation and under construction
8,470 MW (1)
10,425 MW (1)
___________________________
(1) High Plains is under construction to be completed by the end of 2009
• Long-term mix and timing of resources largely will depend on the
specifics of climate change and renewable energy regulations
specifics of climate change and renewable energy regulations
• In response to regulatory uncertainty, the company is planning for a
diverse resource mix consisting of:
diverse resource mix consisting of:
– Wind and other renewables
– Gas-fueled generation
– Firm market purchases
– Demand-side management, including both dispatchable load control and energy
efficiency measures
efficiency measures
– Distributed generation, such as customer-owned standby generation and combined
heat and power projects
heat and power projects
Questions
2009 Fixed-Income Investor Conference
Bill Fehrman
President - - MidAmerican Energy Company
Wind Projects
MidAmerican Energy
Service Territory
Service Territory
Major Generating Facilities
___________________________
(1) Net owned MW in operation per MidAmerican Energy Holdings Company
December 31, 2008, Form 10-K
December 31, 2008, Form 10-K
SD
NE
KS
MO
IL
WI
MN
IA
• Headquartered in Des Moines, Iowa
• 3,649 employees
• 1.4 million electric and natural gas
customers in four Midwestern states
customers in four Midwestern states
• 6,428 net MW generation capacity(1)
• Generating capacity by fuel type(1)
– Coal 52%
– Natural gas 20%
– Wind 20%
– Nuclear 7%
– Other 1%
• Customer Service
– Customer service results continue to be strong, ranking first in electric residential, electric
business and gas residential based on 2008 J.D. Power and Associates Customer Satisfaction
Studies
business and gas residential based on 2008 J.D. Power and Associates Customer Satisfaction
Studies
– Receivables aging trend is slightly unfavorable, with $9.8 million over 90 days as of the end of
February 2009, compared to $9.6 million over 90 days during the same period in 2008
February 2009, compared to $9.6 million over 90 days during the same period in 2008
– Bad debt expense increased from $10 million in 2007 to $11.2 million in 2008 and is forecasted
at $11.2 million in 2009
at $11.2 million in 2009
– Base electric rate stability for customers through 2013
– Increased focus on energy efficiency programs to provide increased value and opportunity for
our customers to better manage their energy costs
our customers to better manage their energy costs
• Employee Commitment
– 2009 is showing significant improvement in safety performance in both numbers of accidents and
level of severity
level of severity
– Focused on control of benefit costs and overall staffing levels to ensure we can continue to offer
sustainable, long-term career opportunities to our current and future employees
sustainable, long-term career opportunities to our current and future employees
– Currently in contract negotiations with our two largest unions
• Financial Strength
– Maintained strong financial results despite severe spring and summer storms/flooding at a cost of
$33.9 million in expense and $27.6 million in capital
$33.9 million in expense and $27.6 million in capital
– 2008 net income up 5.2% to $343 million with a return on average equity of 14%
– 2009 financial results currently are running slightly behind 2008 results due to weak wholesale
electric prices resulting in lower year-to-date wholesale margins and a 9.8% decline in industrial
sales year to date as compared to 2008
electric prices resulting in lower year-to-date wholesale margins and a 9.8% decline in industrial
sales year to date as compared to 2008
– No new debt issuance is expected to be needed in 2009
– New debt in 2010 is a possibility if strategic opportunities for new wind generation projects
become available
become available
– MEC is in a long generation position with a diversified portfolio, which will be a significant
strategic advantage as markets regain strength and new federal environmental programs are
enacted
strategic advantage as markets regain strength and new federal environmental programs are
enacted
– Assessing longer term fuel purchases to provide price stability and certainty for our customers
and regulators
and regulators
• Environmental Respect
– Continued investment in emissions control projects
• Low NOx burners/overfire air systems at all coal-fueled units
• Dry scrubber and baghouse project nearing completion at Walter Scott, Jr. Energy Center
Unit 3 (May 2009)
Unit 3 (May 2009)
• Activated carbon injection systems at Louisa Generating Station and Walter Scott, Jr. Energy
Center Unit 3 completed by December 2009
Center Unit 3 completed by December 2009
• Regulatory Integrity
– Focus is always on a balanced outcome for our customers, communities, regulators and
legislators
legislators
– Significant use of binding ratemaking principles in advance of construction provides for reduced
business risk during future rate cases while meeting the expectations of policymakers and
regulators
business risk during future rate cases while meeting the expectations of policymakers and
regulators
– Results in positive relationships with regulators and policymakers
• Operational Excellence
– Significant operational focus around emissions control to show systemwide year-over-year
improvements in nitrogen oxides, sulfur dioxide and carbon dioxide emissions on a
improvements in nitrogen oxides, sulfur dioxide and carbon dioxide emissions on a
pound-per-megawatt-hour basis as compared to emissions in 2008
– Walter Scott, Jr. Energy Center Unit 3 and 4 Maintenance Outages
• Major outage planned at WSEC Unit 3 this spring to bring the new baghouse and scrubber
on-line
• Detailed planning is underway for the first major WSEC Unit 4 outage to be completed in
2010
2010
– Assessing membership in a regional transmission organization to greatly improve operational
access, provide better wholesale margins and minimize regulatory compliance exposure
access, provide better wholesale margins and minimize regulatory compliance exposure
– Automated Meter Reading
• Electric meters replaced and remote modules installed on existing gas meters
• Forecasted investment of $78.5 million
• Total project will be completed ahead of schedule by year-end
• 623 megawatts brought on-line in 2008
• 1,284 megawatts owned and operated, which ranks MEC No. 1 in wind
generation ownership among rate-regulated utilities in the United States
generation ownership among rate-regulated utilities in the United States
• Continue to improve MEC’s overall carbon footprint
__________________________
(1) Including AFUDC
December 31, 2000
December 31, 2008
___________________________
(1) Net owned MW in operation
4,086 MW (1)
6,428 MW (1)
• MidAmerican Energy Company reached a settlement on ratemaking
principles with the Iowa Office of Consumer Advocate for the development
of additional wind generation. Key provisions of the settlement are:
principles with the Iowa Office of Consumer Advocate for the development
of additional wind generation. Key provisions of the settlement are:
– Develop up to 1,001 MW of new wind generation by December 31, 2012
– Return on equity is 12.2%
– Projects that do not exceed stipulated cost cap levels (installed cost/kW) are not subject to
prudence or other regulatory review
prudence or other regulatory review
– Depreciable life for wind generation is 20 years
• MidAmerican Energy Company made a ratemaking principles application
filing with the Iowa Utilities Board March 24, 2009
filing with the Iowa Utilities Board March 24, 2009
• With 28% of generating capacity currently provided by noncarbon sources
and a settlement agreement reached for up to an additional 1,001 MW,
coupled with the new emissions control projects, MidAmerican Energy is
well-positioned to meet the long-term needs of its customers in an
environmentally responsible manner
and a settlement agreement reached for up to an additional 1,001 MW,
coupled with the new emissions control projects, MidAmerican Energy is
well-positioned to meet the long-term needs of its customers in an
environmentally responsible manner
Questions
2009 Fixed-Income Investor Conference
Mark Hewett
President - - Northern Natural Gas Company
TX
OK
KS
NE
SD
MN
WI
IA
• Headquartered in Omaha, Nebraska
• 864 employees
• 15,200-mile interstate natural gas
transmission pipeline
transmission pipeline
• Market area design capacity of 5.3 Bcf/day
plus 2.0 Bcf/day field area capacity
plus 2.0 Bcf/day field area capacity
• Five natural gas storage facilities with a
total firm capacity of 73 Bcf and more than
2.0 Bcf of peak day delivery capability
total firm capacity of 73 Bcf and more than
2.0 Bcf of peak day delivery capability
• Access to five major supply basins
• Annual deliveries of approximately 1.0 Tcf
• Continued strong operating results in 2008
– Redfield storage expansion added 8 Bcf of firm storage capacity contracted for
20 years at market-based rates
20 years at market-based rates
– Completed several Northern Lights expansion projects, adding almost 100,000 dth
per day of additional market area capacity
per day of additional market area capacity
– Completed the sale of the Beaver and Hemphill assets as part of the asset
rationalization strategy, realizing $80 million in proceeds with minimal loss of
operating income
rationalization strategy, realizing $80 million in proceeds with minimal loss of
operating income
– Maintained pipeline integrity while operating costs and staffing remained within
budget
budget
• In the 2009 Mastio & Company pipeline industry survey report,
Northern was rated No. 1 out of 16 Mega Pipelines and No. 3 out of 41
interstate pipelines in customer satisfaction
Northern was rated No. 1 out of 16 Mega Pipelines and No. 3 out of 41
interstate pipelines in customer satisfaction
• As a part of the MidAmerican Energy Pipeline Group, named
2008 Energy Transporter of the Year by Platts Global Energy Awards
2008 Energy Transporter of the Year by Platts Global Energy Awards
• Strategic location in high-demand, upper Midwest market areas
• Retains competitive advantage by providing delivery to city gates in
Northern’s upper Midwest market area
Northern’s upper Midwest market area
• Expanding electric generation and other end-use markets enabled
Northern to establish daily peak delivery record in 2008-2009 winter
Northern to establish daily peak delivery record in 2008-2009 winter
• Customer base dominated by local distribution companies
• Lowest transportation cost of natural gas to customers in the upper
Midwest
Midwest
• Provides customers with flexibility to access multiple supply basins
– Hugoton, Permian, Anadarko, Rocky Mountain and Canada
Market Area Transportation
Contract Maturities (1)
__________________________
(1) Based on MDQ (Maximum Daily Quantities of market area
entitlement in decatherms)
entitlement in decatherms)
Transportation & Storage Revenue
• 70% of 2008 market area transportation revenue was derived from local
distribution companies
distribution companies
• 54% of 2008 storage revenue resulted from long-term firm contracts, with an
average remaining contract life of approximately 9 years
average remaining contract life of approximately 9 years
• Nearly 50% of market area capacity is contracted beyond 2015
• Shippers that do not meet our tariff credit standards are required to post collateral
55
• Multiyear market area expansion started in
2006
2006
– Part of long-term agreement commitments from
large customers in Twin Cities area
large customers in Twin Cities area
– Serving power, ethanol, industrial and native
growth loads
growth loads
– Increased market area capacity
• 2007 projects added 400,000 dth per day
• 2008 projects added 100,000 dth per day
• 2009 - 2011 projects will add 150,000 dth per
day
day
• Project cost of more than $350 million, of
which $228 million incurred through 2008
which $228 million incurred through 2008
• 2009 - 2011 expansion includes pipeline,
compression and TBS facilities to serve core
markets and power load
compression and TBS facilities to serve core
markets and power load
2009 Fixed-Income Investor Conference
Micheal Dunn
President - - Kern River Gas Transmission Company
CA
NV
WY
UT
AZ
• Headquartered in Salt Lake City, Utah
• 164 employees
• 1,700-mile interstate natural gas
transmission pipeline
transmission pipeline
• Delivers natural gas from Rocky
Mountain basin to markets in Utah,
Nevada, California and Arizona
Mountain basin to markets in Utah,
Nevada, California and Arizona
• Design capacity: 1.8 million dth per
day of natural gas
day of natural gas
• Kern River delivers approximately 25%
of California’s demand for natural gas
of California’s demand for natural gas
• Scheduled throughput exceeds 124% of
pipeline design
pipeline design
• Kern River filed rate case April 30, 2004
– FERC issued opinion January 15, 2009,
setting return on equity at 11.55%
setting return on equity at 11.55%
– Kern River submitted compliance filing
March 2, 2009
March 2, 2009
– Expect final order by third quarter 2009
• Pipeline of choice to Southern California and Las Vegas
Daily Average Scheduled Volume
Daily Throughput in Dth
*
• Access to economical Rocky Mountain gas
supplies
supplies
– 299 (1) TCF of proven and undiscovered
potential reserves
potential reserves
• Direct service to end-users avoids rate
stacks of local distribution companies
stacks of local distribution companies
• Relatively new system
– Efficient
– Low fuel rates
– Limited cost for integrity management
• Strong market growth
– Gas is bridge fuel for electric generation
– 11,500 MW projected for California
– 500 MW projected for Nevada
• Kern River is only major pipeline delivering
gas from favorably priced Rocky Mountain
supply basin directly to California
gas from favorably priced Rocky Mountain
supply basin directly to California
___________________________
(1) Source: Ziff Energy Group
• 65% of revenue is from demand charges
• 88% of contracts mature after 2015
• Weighted average shipper rating of BBB+/Baa1
• Shippers that do not meet our tariff credit standards are required to post collateral
__________________________
(1) Based on demand daily quantity
• Economically expand by 145 MDth/d
• Fully contracted with signed precedent
agreements from 11 shippers
agreements from 11 shippers
– 45% 15-year and 55% 10-year contracts
– Weighted average rating between A- and
BBB+
BBB+
• Service to Southern California and
Las Vegas
Las Vegas
• $62 million capital cost
• Add 20,500 HP of incremental
compression
compression
• Restage existing compression
• Increase maximum allowable operating
pressure from 1,200 psig to 1,333 psig
pressure from 1,200 psig to 1,333 psig
• FERC certificate approval anticipated to be
received by April 2009
received by April 2009
• Anticipated in-service: December 2009
Las Vegas
Bakersfield
Los Angeles
Salt Lake
City
Muddy Creek
Mainline Expansion
• Economically expand by 266 MDth/d
– 20-year term contract with NV Energy
• Service to Las Vegas
• $373 million capital cost
• Close Wasatch Loop with 28 miles of
36” pipe
36” pipe
• Add 78,000 HP of new compression at
four locations and restage four existing
compressors
four locations and restage four existing
compressors
• Submit request to FERC in
December 2009
December 2009
• Anticipated in-service: November 1, 2011
Backhaul Capacity Contract
• New ability to receive 400 MDth/d of
firm backhaul
firm backhaul
• Anticipated in-service: April 1, 2009
Bakersfield
Los Angeles
Salt Lake
City
Wasatch Loop
Las Vegas
Questions
David L. Sokol
Chairman of the Board
MidAmerican Energy Holdings Company
Discussion of the Economic Crisis & Related
Government Policy
Government Policy
• Economic crisis and related government policy
– Never let a crisis go to waste
– Solve banking/financial crisis or legislate in energy, healthcare and education
• National energy policy
– National RPS, transmission reform and climate change all in 2009?
• Cap-and-trade
– Acid rain program: buy credits or buy technology
– Carbon capture today: nothing to trade
– Another Wall Street product
– European Union experience - wild fluctuations
– Hides the real costs
– Better to impose a direct tax
• Modernization of the grid
– Siting reform - greater federal role
– One-stop shop for federal lands
– Supersizing new lines
– Renewables-only transmission lines?
Topics for Discussion
Questions
