MEHC

--Issuer Default Rating (IDR) at 'BBB+';

--Senior Unsecured Debt at 'BBB+';

--Trust Preferred Stock at 'BBB';

--Short-term IDR at 'F2'.

PacifiCorp (PPW)

--IDR at 'BBB';

--Senior Secured Debt at 'A-';

--Senior Unsecured Debt at 'BBB+';

--Preferred Stock at 'BBB';

--Short-term IDR at 'F2';

--Commercial Paper at 'F2'.

MidAmerican Energy Company (MEC)

--IDR at 'A-';

--Senior Unsecured Debt at 'A';

--Preferred Stock at 'A-';

--Short-term IDR at 'F1';

--Commercial Paper at 'F1'.

MidAmerican Funding, LLC (MF)

--IDR at 'BBB+';

--Senior Secured Debt at 'A-'.

Northern Natural Gas Company (NNG)

--IDR at 'A';

--Senior Unsecured Debt at 'A'.

Kern River Funding Corporation (KRFC)

--IDR at 'A-';

--Senior Unsecured Debt at 'A-'.

The Rating Outlook is Stable. Approximately $20 billion of debt is affected by the rating action.

MEHC's ratings and Stable Outlook reflect the company's diversified cash flows from six relatively low-risk utilities and natural gas pipelines located in the U.S. and U.K., solid credit metrics and strong liquidity position. Consistent with Fitch's 'Corporate and Subsidiary Rating Linkage Criteria,' MEHC's ratings also consider the positive credit implications of its status as a subsidiary of Berkshire Hathaway Inc. (BRK, IDR 'AA+' with a Negative Outlook) including BRK's strategic commitment to expand MEHC's investments in regulated assets. BRK has opportunistically provided capital and financing to MEHC to pursue such acquisitions including the March 2006 PPW acquisition and aborted acquisition of Constellation Energy Group (CEG) in 2008.

MEHC's affiliation with BRK provides two unique, specific financial advantages to the intermediate holding company and its subsidiaries. First, unlike most utility holding companies, MEHC benefits significantly from capital retained as the direct result of BRK's financial strength, which obviates the need to upstream dividends. Second, MEHC and BRK have entered into an equity commitment agreement (ECA). The ECA provides equity capital of up to $3.5 billion at the request of MEHC. The proceeds of any such equity contribution shall only be used for the purpose of paying when due MEHC debt obligations and funding the general corporate purposes and capital requirements of MEHC's regulated subsidiaries. The ECA expires Feb. 28, 2011. These factors mitigate concern regarding MEHC's moderately high consolidated financial leverage relative to Fitch's 'BBB+' guidelines and large consolidated capital expenditure program.

In September 2008, MEHC announced its planned acquisition of CEG and immediately invested $1 billion (provided by BRK through issuance of MEHC preferred stock) to support CEG's business operations during a period of extreme financial stress. In December 2008, MEHC and CEG announced an agreement to terminate the Sept. 19, 2008 merger agreement.

As a result of the termination of the proposed merger agreement, MEHC received cash payments, including a $175 million break-up fee and common shares from CEG that were monetized during 2008 and the first half of 2009. Total cash proceeds to MEHC from the CEG transaction were $2.1 billion pretax, and approximately $1.7 billion after tax. After repaying the $1 billion of preferred securities issued to its parent to fund the CEG transaction, cash proceeds to MEHC were approximately $725 million, of which $493 million was used to reduce debt and fund capex. MEHC invested the remaining $232 million in return for a 10% ownership interest in BYD Company Limited, which is active in rechargeable battery, cell phone and other technology business lines and automobile manufacturing in China.