SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   FORM 10-Q

                 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

                      THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)
[X]   QUARTERLY  REPORT  PURSUANT TO  SECTION 13  OR  15(d) OF  THE SECURITIES
      EXCHANGE  ACT OF 1934
 
For the quarterly period ended             March 31, 1994                     

                                      OR
[ ]   TRANSITION  REPORT PURSUANT  TO SECTION  13 OR  15(d) OF  THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from                         to                     
Commission file number                              0-4117-1                  

                          IES UTILITIES INC.                                  
           (Exact name of registrant as specified in its charter)

            Iowa                                   42-0331370                  
(State or other jurisdiction of                 (I.R.S. Employer
 incorporation or organization)                Identification No.)

  IE Tower, Cedar Rapids, Iowa                            52401               
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code    (319) 398-4411          


Indicate by  check  mark whether  the  registrant (1)  has  filed all  reports
required to be filed by Section 13 or 15(d)  of the Securities Exchange Act of
1934  during the  preceding 12  months (or  for such  shorter period  that the
registrant was required  to file such  reports), and (2)  has been subject  to
such filing requirements for the past 90 days.
Yes  X    No    

Indicate the number  of shares outstanding of each of  the issuer's classes of
common stock, as of the latest practicable date.


      Class                               Outstanding at April 30, 1994       
Common Stock, $2.50 par value                    13,370,788 shares 

 


                              IES UTILITIES INC.


                                     INDEX




                                                                      Page No.


Part I.  Financial Information.



Item 1.    Financial Statements.

      Balance Sheets -
        March 31, 1994 and December 31, 1993                            3 - 4

      Statements of Income -
        Three and Twelve Months Ended
        March 31, 1994 and 1993                                           5   

      Statements of Cash Flows -
        Three and Twelve Months Ended
        March 31, 1994 and 1993                                           6   

      Notes to Financial Statements                                     7 - 15

Item 2.   Management's Discussion and Analysis of the
           Results of Operations and Financial Condition.              16 - 25



Part II.  Other Information.                                           26 - 28



Signatures.                                                              29   




                        PART 1. - FINANCIAL INFORMATION
 ITEM 1. - FINANCIAL STATEMENTS

                                BALANCE SHEETS

                                                March 31,
                                                   1994          December 31,
 ASSETS                                        (Unaudited)           1993
                                                       (in thousands)
 Utility plant, at original cost:
     Plant in service -
       Electric                             $    1,718,712    $    1,707,278
       Gas                                         149,187           147,956
       Other                                        75,456            75,845
                                                 1,943,355         1,931,079
     Less - Accumulated depreciation               832,316           813,312
                                                 1,111,039         1,117,767
     Leased nuclear fuel, net of                   
       amortization                                 47,450            51,681
     Construction work in progress                  47,068            41,937
                                                 1,205,557         1,211,385
                                             
                                             
 Current assets:                             
   Cash and temporary cash investments              12,740            18,313
   Accounts receivable -                     
     Customer, less reserve                         20,814            22,679
     Other                                           8,543            10,330
   Income tax refunds receivable                     8,805             8,767
   Production fuel, at average cost                 11,281            14,338
   Materials and supplies, at average              
     cost                                           27,718            26,861  
   Regulatory assets                                 8,623             6,421 
   Prepayments and other                            20,247            31,502 
                                                   118,771           139,211
                                             
                                             
 Other assets:                               
   Regulatory assets                               168,729           149,978
   Nuclear decommissioning trust funds              29,946            28,059
   Other investments                                 3,606             2,821
   Deferred charges and other                       16,952            15,524
                                                   219,233           196,382
                                            $    1,543,561    $    1,546,978
                                             


                                      BALANCE SHEETS (CONTINUED)

                                                     March 31,
                                                       1994           December
 CAPITALIZATION AND LIABILITIES                   (Unaudited)         31, 1993
                                                          (in thousands)     
 Capitalization:
 Common stock - par value $2.50 per share -           
  authorized 24,000,000 shares; 13,370,788 
  shares outstanding                        $        33,427   $       33,427
 Paid-in surplus                                    279,042          279,042 
 Retained earnings ($18,209,000 restricted
  as to payment of cash dividends)                  196,577          188,862
      Total common equity                           509,046          501,331
 Cumulative preferred stock - par value $50       
  per share - authorized 466,406 shares; 
  366,406 shares outstanding                         18,320           18,320  
 Long-term debt                                     430,397          480,074
                                                    957,763          999,725
                                                                
                                                                
 Current liabilities:                                   
  Short-term borrowings                                 -             24,000
  Capital lease obligations                          13,831           15,345
  Sinking funds and maturities                       50,224              224
  Accounts payable                                   40,336           47,179 
  Dividends payable                                     229            5,229   
  Accrued interest                                   11,118            9,438
  Accrued taxes                                      42,345           39,763
  Accumulated refueling outage provision              5,797            2,660
  Adjustment clause balances                          9,873            5,149
  Provision for rate refund liability                 9,085            8,670
  Other                                              26,065           27,038
                                                    208,903          184,695
                                                                
 Long-term liabilities:                                 
  Capital lease obligations                          33,619           36,336
  Liability under National Energy Policy Act 
    of 1992                                          12,065           11,984
  Environmental liabilities                          18,932            9,130
  Other                                              29,033           25,197
                                                     93,649           82,647
                                                                
 Deferred credits:                                      
  Accumulated deferred income taxes                 241,461          237,464
  Accumulated deferred investment tax credits        41,785           42,447
                                                    283,246          279,911
                                                                
                                                                
 Commitments and contingencies (Note 6)                 
                                                                
                                                                
                                               $  1,543,561   $    1,546,978
                                                                
The accompanying Notes to Financial Statements are an integral part of 
these statements.





                                   STATEMENTS OF INCOME (UNAUDITED)


                                    For the Three                        For the Twelve
                                    Months Ended                          Months Ended                                       
                                      March 31                              March 31
                               1994               1993               1994               1993
                                                   (in thousands)
                                                                   
 Operating revenues:                                          
  Electric             $        123,918    $      126,627    $      547,812    $      474,220
  Gas                            65,134            64,335           155,117           154,957
  Steam                           2,961             2,823             9,049             8,377                                       
                                192,013           193,785           711,978           637,554                                       
                                                              
 Operating expenses:                                          
  Fuel for                                                    
  production                     22,344            24,541            85,506            78,396
  Purchased power                13,602            22,108            84,944            74,967
  Gas purchased for 
    resale                       49,116            48,229           110,010           112,023 
  Other operating
    expenses                     30,982            27,781           126,409           118,163
  Maintenance                    10,895            10,378            46,735            40,233
  Depreciation and
    amortization                 19,160            17,522            71,045            65,613
  Property taxes                 10,177             8,900            37,703            32,504
  Federal and state                                           
    income taxes:
    Current                      10,130             8,781            29,710            31,493
    Deferred                      1,097               771            16,236            (3,497)
    Amortization of     
     investment tax credits        (662)             (696)           (4,827)           (2,781)
  Miscellaneous taxes             1,489             1,352             5,023             5,104 
                                168,330           169,667           608,494           552,218                                       
      
                                                              
 Operating income                23,683            24,118           103,484            85,336                                       
      
                                                              
                                                              
 Other income and
  deductions:
  Allowance for
    equity funds                                                
    used during
    construction                    540               114             1,250             1,726
  Miscellaneous, net                914               558             2,604             2,630 
                                  1,454               672             3,854             4,356                                       
                                                              

 Interest:                                                    
  Long-term debt                  9,490             9,109            35,307            36,384
  Other                           1,040             1,549             4,734             4,471
  Allowance for
    debt funds
    used during
    construction                   (337)             (291)           (1,194)           (1,353)    
                                 10,193            10,367            38,847            39,502                                       
                                                              
 Net income                      14,944            14,423            68,491            50,190

 Preferred and
   preference                
   dividend requirements            229               229               914             1,456   

 Net income available
   for common stock    $         14,715    $       14,194    $       67,577    $       48,734        

The accompanying Notes to Financial Statements are an integral part of 
these statements.








                                                 STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                                             For the Three                      For the Twelve
                                                                             Months Ended                        Months Ended
                                                                               March 31                            March 31
                                                                         1994             1993               1994              1993 
                                                                                                                     
 Cash flows from operating activities:                                                                
   Net income                                                     $     14,944      $    14,423      $       68,491      $   50,190
   Adjustments to reconcile net income to net cash flows                                              
     from operating activities -                                                                      
       Depreciation and amortization                                    19,160           17,522              71,045          65,613 
       Principal payments under capital lease obligations                4,427            3,418              12,439          12,976
       Deferred taxes and investment tax credits                           246              (34)             10,813          (6,174)
       Amortization of deferred charges                                    269              197               1,020           1,040
       Refueling outage provision                                        3,137            2,995              (4,747)          4,721
       Allowance for equity funds used during construction                (540)            (114)             (1,250)         (1,726)
       (Gain) loss on disposition of assets, net                           -                (16)               (639)            (16)
       Other                                                               -                 26                 -               307
   Other changes in assets and liabilities -                                                          
       Accounts receivable                                               3,652           (8,897)              4,234          (8,818)
       Sale of utility accounts receivable                                 -             (7,210)             17,700             500
       Production fuel                                                   3,057            6,742               1,040           4,142
       Accounts payable                                                 (5,299)            (788)             (2,869)         (9,003)
       Accrued taxes                                                     2,544           (1,189)             (6,748)         11,575
       Provision for rate refunds                                          415            1,770              (1,536)          7,324
       Adjustment clause balances                                        4,724           11,495                (405)          1,050
       Gas in storage                                                   10,090           11,980              (4,199)            (69)
       Deferred energy efficiency costs                                 (3,399)          (1,201)            (11,961)         (7,707)
       Other                                                            (1,912)          (1,128)              1,481          (9,468)
        Net cash flows from operating activities                        55,515           49,991             153,909         116,457
                                                                                                      
                                                                                                      
 Cash flows from financing activities:                                                                
   Dividends declared on common stock                                   (7,000)         (10,000)            (28,300)        (21,490)
   Dividends declared on preferred and preference stock                   (229)            (229)               (914)         (1,456)
   Dividends payable                                                    (5,000)             -                   -               229 
   Equity infusion from parent company                                     -             50,000                 -            50,000
   Proceeds from issuance of long-term debt                                -                -               119,400          33,400
   Sinking fund requirements and reductions in                                                        
     long-term debt and preferred and preference stock                     -                -               (79,624)        (38,673)
   Net change in short-term borrowings                                 (24,000)         (66,600)            (25,960)         25,960
   Principal payments under capital lease obligations                   (3,720)          (3,567)            (11,429)        (11,725)
   Other                                                                   -                 (1)                (1)            (559)
    Net cash flows from financing activities                           (39,949)         (30,397)            (26,828)         35,686 

 Cash flows from investing activities:
   Construction and acquisition expenditures                           (18,992)         (16,876)           (115,328)       (165,974)
   Nuclear decommissioning trust funds                                  (1,383)          (1,383)             (5,532)         (5,532)
   Proceeds from disposition of assets                                     -                 36                 801              36
   Other                                                                  (764)          (1,488)              4,092           1,680
     Net cash flows from investing activities                          (21,139)         (19,711)           (115,967)       (169,790)
                                                                                                      
                                                                                                      
 Net increase (decrease) in cash and temporary cash                    
   investments                                                          (5,573)            (117)             11,114         (17,647)
                                                                                                      
 Cash and temporary cash investments at beginning of period             18,313            1,743               1,626          19,273
                                                                                                      
                                                                                                      
 Cash and temporary cash investments at end of period             $     12,740      $     1,626      $       12,740      $    1,626
                                                                                                      
                                                                                                      
 Supplemental cash flow information:                                                                      
   Cash paid during the period for -
     Interest                                                     $      8,899      $     9,961      $       38,685      $   41,247
     Income taxes                                                 $        (39)     $     3,782      $        4,690      $   26,401

   Noncash investing and financing activities -                                                       
     Capital lease obligations incurred                           $        196      $    10,495      $        4,308      $   11,510
                                                                                                      
The accompanying Notes to Financial Statements are an integral part of 
these statements.






                   NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

                                March 31, 1994

(1)   GENERAL:

      The interim Financial  Statements have  been prepared  by IES  Utilities
Inc.  (the Company), without  audit, pursuant to the  rules and regulations of
the  Securities  and  Exchange Commission.    The  Company  is a  wholly-owned
subsidiary  of IES Industries Inc. (Industries) and  was formed as a result of
the  merger  of  Industries'  former wholly-owned  utility  subsidiaries  Iowa
Electric  Light and  Power Company  (IE) and  Iowa Southern  Utilities Company
(IS),  effective   December 31, 1993.     Certain  information   and  footnote
disclosures normally  included in financial statements  prepared in accordance
with generally accepted  accounting principles have been  condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.  In
the  opinion of the Company, the Financial Statements include all adjustments,
which are normal and recurring in nature, necessary  for the fair presentation
of the results  of operations and  financial position.   Certain prior  period
amounts  have  been  reclassified   on  a  basis  consistent  with   the  1994
presentation.

      It is suggested that  these Financial Statements be read  in conjunction
with the Financial Statements and the notes thereto included  in the Company's
Form 10-K for the year ended December 31, 1993.   The accounting and financial
policies relative  to the following items  have been described  in those notes
and have been omitted  herein because they have not changed materially through
the date of this report:

      General
      Summary of significant accounting policies (other than discussed in
            Note 2)
      Acquisition of Iowa service territory of Union Electric Company
      Leases
      Income taxes
      Benefit plans (other than discussed in Note 2(a))
      Preferred and preference stock
      Debt (other than discussed in Note 5)
      Estimated fair  value of financial instruments (other  than discussed in
            Note 2(b))
      Commitments
      Jointly-owned electric utility plant
      Segments of business

(2)   NEW ACCOUNTING STANDARDS:
      (a)   Accounting for Postemployment Benefits -

      On January 1, 1994, the  Company adopted the provisions of  Statement of
Financial  Accounting  Standards   (SFAS)  112,  "Employers'  Accounting   for
Postemployment Benefits"  and its adoption did  not have a material  effect on
the Company's financial  position or  results of operations.   This  statement
requires  that  benefits  offered  to  former  or  inactive   employees  after
termination  of employment, but before retirement, be accrued over the service
lives of  the employees  if all of  the following  conditions are met:  1) the
obligation relates  to services  already performed,  2) the  employees' rights
vest,  3)  the  payments are  probable,  and  4)  the  amounts are  reasonably
determinable.   Otherwise, such obligations  are to be recognized  at the time
they become probable and reasonably determinable.   Prior to 1994, the Company
had generally accounted for these obligations as they were paid.

      (b)   Accounting for Certain Investments in Debt and Equity Securities -

      On  January 1,  1994,  the Company  adopted  SFAS 115,  "Accounting  for
Certain  Investments in  Debt and  Equity Securities."   This  standard, which
applies   to   the   Company's   nuclear  decommissioning   trust   funds   at
March 31, 1994,  requires that unrealized gains and losses on such investments
be included in the  reported balance of such investments.   At March 31, 1994,
the  balance  of the  "Nuclear decommissioning  trust  funds" included  in the
Balance  Sheets included $0.2 million  of unrealized gains  on the investments
held  in the trust funds.  The  reserve for decommissioning costs, included in
"Accumulated  depreciation"  in  the   Balance  Sheets  was  increased  by   a
corresponding amount, and there was no effect on net income from adopting this
standard.

(3)   RATE MATTERS:

      In October  1991, IE applied  to the Iowa  Utilities Board (IUB)  for an
increase in retail electric rates of $18.9 million annually, or 6.0%.  The IUB
approved an interim  rate increase  of $15.6 million,  annually, which  became
effective in December 1991, subject to refund.

      In  December 1992,  the  IUB issued  its   "Order  On Rehearing,"  which
affirmed its original decision  approving an annual electric rate  increase of
$7.9 million.  IE appealed one  issue in the IUB's Order to the  Iowa District
Court (Court) and, in  December 1993, the Court issued its  decision upholding
the  IUB's Order.  The Company did not appeal the Court's decision to the Iowa
Supreme Court.

      As  a result of the  Court's decision, a  refund, including interest, of
$9.1 million is required  at March 31, 1994.  The refund  will be completed in
the second quarter of 1994.  There  will be no effect on electric revenues and
net income when  the refund is made because the Company has been reserving for
the effect of the refund.

(4)   UTILITY ACCOUNTS RECEIVABLE:

      The  Company has entered into two agreements, one with limited recourse,
to sell undivided  fractional interests of an aggregate of  $65 million in its
pool of utility  accounts receivable.   At March 31, 1994,  $53.2 million  was
sold under  the agreements.  The  agreements were scheduled to  expire in June
and December  1994.   In April 1994,  the Company consolidated  the agreements
into  one agreement.   The new agreement  provides the Company  the ability to
sell, with limited recourse,  a maximum of $65 million in  its pool of utility
accounts receivable and expires in 1999.

(5)   SHORT-TERM DEBT:

      At  March 31, 1994, the  Company had  bank lines  of credit  aggregating
$67.7 million,  of  which $7.7 million  was  being used  to  support pollution
control obligations.   Commitment fees are  paid to maintain  these lines  and
there are  no  conditions which  restrict  the unused  lines  of credit.    In
addition  to the above, the Company has  an uncommitted credit facility with a
financial institution whereby it  can borrow up to $50 million.  Rates are set
at the time of borrowing and no fees  are paid to maintain this facility.   At
March 31, 1994, there were no outstanding borrowings under this facility.  The
Company also has a letter  of credit in the amount of $3.4  million supporting
its variable rate pollution control obligations.

(6)   CONTINGENCIES:
      (a)   Nuclear Insurance Programs -

      The  Price-Anderson  Amendments  Act of  1988  (1988  Act) provides  the
Company  with  the  benefit  of  $9.3 billion  of  public  liability  coverage
consisting  of  $200 million  of   insurance  and  $9.1 billion  of  potential
retroactive assessments from the  owners of nuclear power plants.   Based upon
its ownership of the Duane Arnold Energy Center (DAEC), under the 1988 Act the
Company could be assessed a maximum  of $79 million per nuclear incident, with
a  maximum  of $10 million  per  year (of  which the  Company's  70% ownership
portion would be $55 million and $7 million, respectively)  if losses relating
to  the  incidents  exceeded  $200  million.    These  limits  are  subject to
adjustments for inflation in future years.

      Pursuant  to  provisions  in  various nuclear  insurance  policies,  the
Company could be  assessed retroactive  premiums in connection  with a  future
accident  at  a nuclear  facility  owned by  a  utility  participating in  the
particular  insurance  plan.   With  respect  to  excess  property damage  and
replacement  power coverages, the Company could be assessed annually a maximum
of $8.5 million and $1 million, respectively, if the insurer's losses relating
to accidents  exceeded its reserves.   While assessments may also  be made for
losses in certain prior years, the Company is not aware of any losses  in such
years that it believes are likely to result in an assessment.

      (b)   Environmental Liabilities -

      At  March 31, 1994,  the Company's Balance  Sheet reflects approximately
$24 million   (including  $5.2   million  as   current)  of   liabilities  for
investigation and  remediation of environmental  issues.  The  recorded amount
represents the Company's estimate of the minimum aggregate amount that will be
incurred for investigation and remediation of  the environmental issues, which
amount is substantially related  to clean-up costs associated with  certain of
the Company's  former manufactured gas plant (FMGP) sites.  In April 1994, the
Company received updated  investigation reports  on a number  of sites,  which
resulted  in the  increase in the  recorded liability at  March 31, 1994.  The
physical  investigations  at  some  sites   indicated  a  greater  volume   of
contaminated material needing  treatment, and a  greater volume of  substances
requiring higher cost incineration,  than was anticipated in prior  estimates.
Prior estimates were based  on investigations conducted at what  were expected
to be representative sites.  It is possible that future cost estimates will be
greater than the current estimates as further investigations are conducted and
as  additional  facts  become  known.   The  Company  has  not  initiated  the
investigation on  two of the  27 sites of  which it has  been identified  as a
Potentially  Responsible Party (PRP), but intends  to do so, and is continuing
work on sites requiring remediation.

      The Company has  been named as a  PRP for the  FMGP sites by either  the
Iowa Department  of Natural Resources  (IDNR) or the  Environmental Protection
Agency (EPA).  The Company is working pursuant to the requirements of the IDNR
and  EPA to  investigate,  mitigate, prevent  and remediate,  where necessary,
damage to property, including  damage to natural resources, at  and around the
27  sites  in order  to  protect  public health  and  the  environment.   Such
investigations  are  expected  to  be  completed  by  1999  and  site-specific
remediations  are anticipated  to be  completed within  three years  after the
completion of the investigations of each site.  The Company may be required to
monitor these  sites for  a number  of years  upon completion  of remediation.
Such monitoring costs are not included in the estimates above.

      The Company is investigating the possibility of obtaining monies through
insurance coverage and  third party  cost sharing for  FMGP investigation  and
clean-up costs.   The amount of  shared costs, if  any, can not  be reasonably
determined  and,  accordingly,  no  potential  sharing has  been  recorded  at
March 31, 1994.   Regulatory  assets  of approximately  $24 million  have been
recorded  in the  Balance Sheets, which  reflect the  future recovery  that is
being  provided  through   rates.    Considering  the  recorded  reserves  for
environmental  liabilities and  the past  rate treatment  allowed by  the IUB,
management believes that the clean-up costs incurred for these FMGP sites will
not have a  material adverse effect  on its financial  position or results  of
operations.

      (c)   Clean Air Act -

      The  Clean  Air  Act Amendments  Act  of  1990  (Act) requires  emission
reductions  of sulfur  dioxide and  nitrogen oxides  to achieve  reductions of
atmospheric chemicals believed to cause acid  rain.  The provisions of the Act
will be implemented in two phases with Phase I affecting two  of the Company's
units beginning in 1995 and Phase II affecting all units beginning in the year
2000.

      The Company expects to meet the requirements of the Act  by switching to
lower  sulfur fuels and through capital expenditures primarily related to fuel
burning equipment  and boiler  modifications.  The  Company estimates  capital
expenditures  at approximately $28 million,  including $4 million  in 1994, in
order to meet these requirements of the Act.

      (d)   National Energy Policy Act of 1992 -

      The National Energy  Policy Act of 1992 requires owners of nuclear power
plants  to pay a special assessment into a "Uranium Enrichment Decontamination
and Decommissioning Fund."   The assessment is  based upon prior nuclear  fuel
purchases  and, for the DAEC, averages  $1.4 million annually through 2007, of
which the Company's 70% share is $1.0 million.  The Company  is recovering the
costs associated  with this  assessment through  its electric  fuel adjustment
clauses  over the period the costs  are assessed.  The  Company's 70% share of
the future  assessment, $13.7 million payable through 2007,  has been recorded
as  a  liability in  the Balance  Sheets,  including $1.6 million  included in
"Current  liabilities - Other,"  with  a  related  regulatory  asset  for  the
unrecovered amount.

      (e)    Federal Energy Regulatory Commission (FERC) Order No. 636 -

      The FERC  issued Order  No.  636 (Order  636) in  1992.   Order 636,  as
modified  on  rehearing,  (1) requires  the Company's  pipeline  suppliers  to
unbundle  their services  so that  gas supplies  are obtained  separately from
transportation service,  and transportation and storage  services are operated
and  billed as  separate  and distinct  services,  (2) requires  the  pipeline
suppliers  to  offer  "no  notice"  transportation service  under  which  firm
transporters (such  as the Company)  can receive delivery  of gas up  to their
contractual capacity  level on  any day without  prior scheduling,  (3) allows
pipelines  to  abandon long-term  (one  year or  more)  transportation service
provided to a customer under an  expiring contract whenever the customer fails
to match the  highest rate and longest  term (up to  20 years) offered to  the
pipeline by other customers for the particular capacity, and  (4) provides for
a mechanism under  which pipelines can  recover prudently incurred  transition
costs associated with the restructuring process.  The Company may benefit from
enhanced  access  to  competitively  priced  gas  supply   and  more  flexible
transportation services as  a result of Order 636.   However, the Company will
be  required to  pay  certain  transition costs  incurred  and billed  by  its
pipeline suppliers as Order 636 is implemented.

      The  Company's three pipeline suppliers have filed tariffs with the FERC
implementing Order  636 and the pipelines have also made filings with the FERC
to  begin collecting  their respective  transition costs.   The  Company began
paying the transition  costs in November 1993, and has recorded a liability of
$5.5 million  for such  transition  costs  that  have  been  incurred  by  the
pipelines  to date, including $1.8 million expected to be billed through March
1995.  While the magnitude of the total transition costs to  be charged to the
Company  cannot yet be determined,  the Company believes  any transition costs
the  FERC would  allow the pipelines  to collect  would be  recovered from its
customers,  based upon past regulatory treatment of  similar costs by the IUB.
Accordingly, regulatory  assets, in amounts corresponding  to the liabilities,
have been recorded to reflect the anticipated recovery.



                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

      The following discussion analyzes  significant changes in the components
of net income and financial condition from the prior periods for IES Utilities
Inc. (the Company).

                             RESULTS OF OPERATIONS

      The Company's net income available  for common stock as compared to  the
same  periods last  year increased $0.5 million  and $18.8 million  during the
three  and  twelve  month periods  ended  March 31, 1994,  respectively.   The
Company's operating income  decreased $0.4 million for the  three month period
and increased $18.1 million  during the twelve month period.   Reasons for the
changes   in  the  results  of  operations  are  explained  in  the  following
discussion.

                               ELECTRIC REVENUES

      Electric revenues decreased $2.7 million during the three month  period,
and  increased $73.6 million  during the  twelve month  period.   Electric Kwh
sales (excluding off-system sales) increased 5% and 19% for the  same periods,
respectively.   Weather normalized sales increased 4% and 18% during the three
and twelve month periods, respectively.

      The twelve month  Kwh sales increase is  affected by the acquisition  of
the Iowa  service territory of  Union Electric Company  (UE), on  December 31,
1992.    (Excluding the  effects  of  sales to  the  UE  customers, Kwh  sales
increased  9% during  this  period).   Industrial  sales continue  to  provide
significant sales growth.   Sales to industrial customers increased  9% during
the three  month period and 31% (largely related  to the acquisition of the UE
territory) during the twelve month period.

      The Company's  electric tariffs include energy  adjustment clauses (EAC)
that are  designed to  currently  recover the  costs of  fuel  and the  energy
portion of purchased power billings to customers.  The revenue decrease during
the three month period is because of lower recovery  of fuel costs through the
EAC  and  lower  off-system sales  to  other  utilities,  partially offset  by
increased Kwh sales as discussed above.   Revenues increased during the twelve
month period primarily because of the increased  Kwh sales discussed above, as
well  as higher fuel  cost recoveries through  the EAC.   These increases were
partially offset by lower  average unit prices resulting from  a preponderance
of  the  Company's Kwh  sales increases  coming  from lower  margin industrial
customers, while Kwh  sales increases  to higher margin  customer classes  are
much lower  than the average  sales increase.   Increased off-system  sales to
other utilities contributed to the revenue increase to a lesser extent for the
twelve month period.

                                 GAS REVENUES

      Gas  revenues increased $0.8  million and $0.2 million for the three and
twelve  month periods  ended  March 31,  1994,  respectively.   The  Company's
tariffs  include purchased gas adjustment  clauses (PGA) that  are designed to
currently recover the cost of gas sold.  Gas revenues increased for  the three
month  period  because  of increased  gas  costs  recovered  through the  PGA,
partially  offset by  the effect  of a  sales decrease  (including transported
volumes) of 3%.  Gas revenues increased for the twelve month period because of
the  effect of  gas rate increases  that became  effective in  September 1992,
substantially  offset by  lower gas  costs recovered through  the PGA  and the
effect of a 3% sales decrease.

                              OPERATING EXPENSES

      Fuel for production decreased $2.2 million during the three month period
primarily  due to larger  under collections of  fuel costs through  the EAC in
1994 as  such  under  collections  are  recorded as  reductions  to  fuel  for
production  expenses.   This decrease  was partially  offset by  increased Kwh
generation  during the  period.   Fuel for  production increased  $7.1 million
during the twelve month  period primarily because of increased  Kwh generation
at the  Company's fossil-fueled generating stations, partially offset by lower
generation  at the Company's nuclear generating plant, the Duane Arnold Energy
Center (DAEC).

      Purchased power  decreased $8.5  million during the  three month  period
primarily because of  a $5.2 million decrease in  capacity charges relating to
the expiration, in  April 1993, of the purchase power  agreement with the City
of Muscatine.  Lower  energy purchases, primarily because of  lower off-system
sales to other utilities, also contributed to the reduction in purchased power
costs  during this period.   Purchased power increased  $10 million during the
twelve month  period; energy  purchases increased  $15.3 million  and capacity
charges decreased $5.3 million.  The increased energy purchases are because of
increased Kwh sales.  Decreased capacity  charges relate to the expiration  of
the  Muscatine purchase power  agreement, partially offset  by higher capacity
costs  relating to  contracts  associated  with  the  acquisition  of  the  UE
territory.

      Gas purchased  for resale  increased  $0.9 million for  the three  month
period  and decreased $2.0 million for the twelve  month period.  The decrease
for the  twelve month  period is  attributable to  the lower  dekatherm sales,
partially offset by higher prices.

      Other operating expenses increased $3.2 million and $8.2 million for the
three and twelve month periods, respectively.   The increase for both  periods
is  primarily attributable  to increased  labor and  benefit costs  and higher
information systems costs.

      Maintenance  expenditures increased $0.5 million and $6.5 million during
the  three  and  twelve  month periods,  respectively,  primarily  because  of
increased maintenance  activities  at the  Company's fossil-fueled  generating
stations and the DAEC.

      Depreciation and  amortization increased  during both  periods primarily
because   of  increases  in  utility  plant  in  service.    Depreciation  and
amortization  expenses for both years include  a provision for decommissioning
the DAEC ($5.5 million annually), which is collected through rates.

      Property taxes increased $1.3 million  and $5.2 million during the three
and twelve month periods, respectively.  These increases are primarily because
of  increased property  taxes associated with  increases in  assessed property
values, and,  for the twelve month  period, the acquisition of  the UE service
territory.

      The increase in total Federal and state income taxes for both periods is
because of an increase in pretax  income and, for the twelve month  period, an
increase of 1% in the statutory Federal income tax rate.

                        LIQUIDITY AND CAPITAL RESOURCES

      The  Company's capital  requirements are  primarily attributable  to its
construction programs and debt maturities and sinking fund requirements.  Cash
and temporary cash  investments increased $11.1 million  for the twelve  month
period.   Cash flows  from operating activities  for the  twelve months  ended
March 31, 1994  were approximately  $154 million and  were primarily  used for
construction and acquisition expenditures and the payment of dividends.

      It is anticipated that the Company's future capital requirements will be
met by both cash flows from  operations and external financing.  The  level of
cash flows  from operations is  partially dependent upon  economic conditions,
legislative activities,  environmental matters  and timely  rate relief.   See
Note 3 and Note 6 of the Notes to Financial Statements for a discussion of the
Company's  rate  cases  and  contingencies.    Access  to  the  long-term  and
short-term capital  and  credit  markets  is  necessary  for  obtaining  funds
externally.

      The  Company's  liquidity  and  capital resources  will  be  affected by
environmental and  legislative issues,  including the ultimate  disposition of
remediation issues surrounding the former manufactured gas plant (FMGP) issue,
the Clean  Air Act  as amended, the  National Energy  Policy Act of  1992, and
Federal  Energy Regulatory Commission (FERC) Order 636, as discussed in Note 6
of the Notes to Financial Statements.  Consistent with rate making principles,
management believes  that the costs  incurred for  the above matters  will not
have  a  material adverse  effect  on  the financial  position  or  results of
operations of the Company.

      The  Iowa  Utilities Board  (IUB) has  adopted  rules which  mandate the
Company  to spend  2%  of electric  and  1.5% of  gas  gross retail  operating
revenues for energy efficiency programs.  Energy efficiency costs in excess of
the  amount in the most recent electric  and gas rate cases are being recorded
as regulatory  assets.  At  March 31, 1994,  the Company had  $21.9 million of
such costs recorded  as regulatory  assets.  Under  this mandate, the  Company
will make its initial filing for recovery  of these costs in the third quarter
of 1994, but will not likely begin recovering the costs until 1995.

                     CONSTRUCTION AND ACQUISITION PROGRAM

      The  Company's   construction   and  acquisition   program   anticipates
expenditures of  $150 million for 1994, of which  approximately 44% represents
expenditures  for  electric  transmission  and  distribution  facilities,  18%
represents fossil-fueled generation  expenditures and  10% represents  nuclear
generation  expenditures.    The  Company  had  construction  and  acquisition
expenditures  of  approximately  $19  million  for  the  three   months  ended
March 31, 1994.  Substantial commitments have been made in connection with the
remaining anticipated expenditures.

      The Company's  levels of  construction and acquisition  expenditures are
projected  to be $149 million in  1995, $144 million in  1996, $149 million in
1997, and  $160 million in 1998.   It is  estimated that approximately  80% of
construction expenditures will  be provided by cash  from operating activities
(after payment of dividends) for the five year period 1994-1998.

      Capital  expenditure,  investment and  financing  plans  are subject  to
continual  review and change.  The capital expenditure and investment programs
may  be revised  significantly as  a result  of many  considerations including
changes in economic  conditions, variations  in actual sales  and load  growth
compared  to  forecasts,  requirements  of environmental,  nuclear  and  other
regulatory  authorities,   acquisition  opportunities,  the   availability  of
alternate energy and purchased  power sources, the ability to  obtain adequate
and timely rate relief, escalations in construction costs and conservation and
energy efficiency programs.

                              LONG-TERM FINANCING

      Other than periodic sinking fund requirements which  the Company intends
to  meet  by  pledging  additional  property,  approximately  $124 million  of
long-term  debt has  scheduled  maturities prior  to  December 31, 1998.   The
Company  intends to  refinance  the  majority  of  the  debt  maturities  with
long-term debt.

      The Indentures pursuant to which the Company issues First Mortgage Bonds
constitute direct first  mortgage liens upon substantially all tangible public
utility  property and contain covenants that restrict the amount of additional
bonds  that may be  issued.  At  March 31, 1994, such restrictions  would have
allowed  the Company to issue $266 million of additional First Mortgage Bonds.
The Company  has received  authority from  the FERC  to issue $250 million  of
First  Mortgage  Bonds  and  is  currently authorized  by  the  SEC  to  issue
$50 million of long-term debt under an existing registration statement.

      The  Company's  Articles  of   Incorporation  authorize  and  limit  the
aggregate amount  of  additional  shares of  Cumulative  Preferred  Stock  and
Cumulative  Preference  Stock which  may be  issued.   At  March 31, 1994, the
Company  could have issued 700,000  shares of Cumulative  Preference Stock and
100,000 additional shares of Cumulative Preferred Stock.

      The Company's capitalization ratios at March 31, 1994 and March 31, 1993
were as follows:

                    Long-term debt              48%
                    Preferred stock              2
                    Common equity               50

                                               100%


      The 1994 ratios include $50 million  of long-term debt that is due
      in  less than one  year because it  is the  Company's intention to
      refinance the debt with long-term issues.


                             SHORT-TERM FINANCING

      For  interim financing, the Company is  authorized by the FERC to issue,
through 1994, up to  $125 million of short-term  notes.  This availability  of
short-term  financing  provides  flexibility  in  the  issuance  of  long-term
securities.   At March 31, 1994,  the  Company had  no outstanding  short-term
borrowings.

      The Company had agreements with separate  financial institutions to sell
undivided fractional interests aggregating $65 million in its pool  of utility
accounts receivable.  At March 31, 1994, $53.2 million had been sold under the
agreements.  In  April 1994, the Company consolidated the  agreements into one
agreement.  The  new agreement provides the Company the  ability to sell, with
limited recourse,  a maximum of  $65 million in its  pool of  utility accounts
receivable and expires in 1999.

      At March  31, 1994,  the Company  had bank  lines of credit  aggregating
$67.7  million, of  which $7.7 million  was  being used  to support  pollution
control  obligations.  Commitment  fees are paid  to maintain  these lines and
there are  no  conditions which  restrict  the unused  lines  of credit.    In
addition  to the above, the Company has  an uncommitted credit facility with a
financial institution whereby  it can borrow up  to $50 million.   The Company
also  has a  letter of credit  in the  amount of  $3.4 million  supporting its
variable rate pollution control obligations.

                             ENVIRONMENTAL MATTERS

      At  March 31, 1994, the Company's  Balance Sheet  reflects approximately
$24 million of liabilities for  investigation and remediation of environmental
issues.  The recorded amount represents the Company's  estimate of the minimum
aggregate amount  that will be  incurred for investigation and  remediation of
the  environmental issues, which  amount is substantially  related to clean-up
costs associated with  certain of the Company's former  manufactured gas plant
(FMGP)  sites.   In  April 1994, the  Company  received updated  investigation
reports on a number  of sites, which resulted in the  increase in the recorded
liability  at  March 31, 1994.   The  physical  investigations  at some  sites
indicated a greater  volume of contaminated material needing  treatment, and a
greater  volume of  substances requiring  higher  cost incineration,  than was
anticipated in prior estimates.   Prior estimates were based on investigations
conducted at  what were expected to  be representative sites.   It is possible
that future  cost  estimates will  be greater  than the  current estimates  as
further investigations  are conducted  and as  additional facts become  known.
The Company  has not  initiated the investigation  on two of  the 27  sites of
which it  has been identified  as a Potentially  Responsible Party  (PRP), but
intends to do so, and is continuing work on sites requiring remediation.

      Considering the recorded reserves  for environmental liabilities and the
past rate treatment allowed by the  IUB, management believes that the clean-up
costs incurred for these FMGP sites will not have a material adverse effect on
its financial position or results of operations.

      Refer to Note 6  of the  Notes to Financial  Statements for  information
relating to  potential environmental liabilities associated  with certain FMGP
sites.



                         PART II. - OTHER INFORMATION

Item 1.  Legal Proceedings.

      Reference  is made to Notes 3 and 6 of the Notes to Financial Statements
for a discussion of rate matters and environmental matters, respectively.

Item 2.  Changes in the Rights of the Company's Security Holders.

None.

Item 3.  Default Upon Senior Securities.

None.

Item 4.  Results of Votes of Security Holders.

None.

Item 5.  Other Information.

The Company  has calculated the ratio of earnings to fixed charges pursuant to
Item 503  of Regulation  S-K  of the  Securities  and Exchange  Commission  as
follows:
 For the twelve months ended:

     March 31, 1994                          3.46
     December 31, 1993                       3.41
     December 31, 1992                       2.49
     December 31, 1991                       2.64
     December 31, 1990                       2.65
     December 31, 1989                       2.82


Item 6.  Exhibits and Reports on Form 8-K.

(a)   Exhibits -

      10(a)       Receivables   Purchase  and  Sale   Agreement  dated  as  of
                  June 30, 1989, as Amended and Restated as of April 15, 1994,
                  among IES Utilities Inc. (as Seller) and CIESCO L.P. (as the
                  Investor) and Citicorp North America, Inc. (as Agent).

      12          Ratio of Earnings to Fixed Charges.

(b)   Reports on Form 8-K -

       Items         Financial
     Reported       Statements         Date of Report        File No.

       2,5,7           None           January 7, 1994         0-4117-1    (1)
        2,7            None           January 7, 1994            0-849    (1)
         7              (2)            March 2, 1994          0-4117-1    (2)


      (1)   Form 8-K filed by IES Utilities Inc. subsequent to the
            merger of  Iowa Electric  Light and Power  Company and
            Iowa    Southern    Utilities    Company,    effective
            December 31, 1993.

      (2)   Form 8-K/A  filed by IES Utilities  Inc. amending Form
            8-K  filed  on  January  7, 1994,  File  No. 0-4117-1,
            providing  the  audited  financial  statements  of the
            Company for the year ended December 31, 1993.




                                  SIGNATURES




      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has  duly caused  this report  to be  signed on  its behalf  by the
undersigned thereunto duly authorized.



                                          IES UTILITIES INC.     
                                          (Registrant)




Date May 12, 1994             By /s/      Dr. Robert J. Latham    
                                          (Signature)
                                          Dr. Robert J. Latham
                                          Senior Vice President, Finance
                                          and Corporate Affairs, & Treasurer





                              By /s/      Richard A. Gabbianelli  
                                          (Signature)
                                          Richard A. Gabbianelli
                                          Controller & Chief
                                          Accounting Officer