Company Recommends Rates Increase to Reflect Unprecedented
                        Nationwide Natural Gas Prices

     PUCN Filing Represents Dollar-for-Dollar Pass-through and No Profits

    LAS VEGAS, Jan. 17 /PRNewswire-FirstCall/ -- Nevada Power Company, a
wholly-owned subsidiary of Sierra Pacific Resources (NYSE: SRP), made its
required annual deferred energy filing today with the Public Utilities
Commission of Nevada (PUCN) to recover costs already incurred and to set a new
rate that more accurately reflects the amount the company expects to pay for
fuel and purchased power in 2006.
    The filing, if approved by the PUCN, would result in an increase of
approximately 9% to recover costs already incurred and an additional increase
of about 14% to account for current and anticipated future costs.  The company
has requested that the new going-forward rate become effective in May 2006,
with recovery for costs already incurred commencing in August.  The ultimate
impact of both requested rate changes for a typical residential customer using
1,250 kilowatt hours per month would be an increase from $127.88 per month to
$158.50.
    Walter Higgins, chairman and chief executive officer of Sierra Pacific
Resources, said, "Prices for natural gas have skyrocketed to unprecedented
levels across the nation over the past year. Natural gas is the primary fuel
used in the Southwest to produce electricity.  These new rates reflect costs
already incurred plus our estimate of higher costs we expect to incur in
2006 for fuel and purchased power.  An increase of this nature is most
certainly not the type of news we like to give our customers and,
unfortunately, is one being faced by most electric companies throughout the
United States.  These amounts represent a dollar-for-dollar pass-through and
we are not allowed to include any profit for our company."
    Higgins pointed out that while the filing today calls for the company to
recover previously incurred fuel and purchased power costs over one
year -- beginning in August -- the company also included what the effects
would be on rates if the Commission decides to allow recovery over two or
three years, as has been done in the past.  "Our company would support any
recovery period that the Commission feels is appropriate for the
$171.8 million that we have expended," he said.
    Additionally, Higgins said that the company will file an update in 60 days
to review changes, if any, to the forecast for fuel and purchased power.  "We
are hopeful that natural gas prices decline over the next couple of months.
If they do, we will reduce our request to change the going-forward rate to a
lower number than the $264.1 million we are currently requesting," Higgins
noted.
    Before the PUCN reaches a decision, public hearings will be held and the
Bureau of Consumer Protection along with other interested parties will have
the opportunity to examine and comment on the filing.
    "Although these increases reflect a nationwide trend," Higgins added, "we
are working diligently to reduce the cost of fuel and purchased power by
adding more efficient power plants to our portfolio as well as diversifying
our energy sources.  As examples, the additions of the Chuck Lenzie and
Silverhawk generating stations reduce our use of natural gas because of their
efficiency.  Also, our recent announcement of our intent to invest billions of
dollars in 'clean' coal facilities in White Pine County, Nevada, and our
ongoing commitment to renewable resources like geothermal, wind and solar,
should further reduce our dependence on natural gas."
    Earlier this month, the company announced the completion of the
acquisition of Silverhawk Power Station, a 560-megawatt natural-gas fueled
combined cycle generating facility.  In addition, the Lenzie Generating
Station, a 1,200-megawatt natural gas-fired combined-cycle power plant, is
expected to come on line in time for the summer cooling season in Las Vegas.
The company said that both plants are more efficient in that they use less
natural gas to produce power.
    Higgins said that while there is no immediate answer to when volatile
energy prices might stabilize, there are a number of things that customers can
do to improve the energy efficiency in homes and businesses that will reduce
bills and save money.  A description of energy efficiency tips, programs, even
a home energy audit are available on Nevada Power's website at
nevadapower.com.

    Nevada Power Company is a regulated public utility engaged in the
distribution, transmission, generation, purchase and sale of electric energy
in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson,
Searchlight, Laughlin and their adjoining areas.  The Company also provides
electricity to Nellis Air Force Base, the Department of Energy at Mercury and
Jackass Flats at the Nevada Test Site.  Nevada Power Company provides
electricity to approximately 725,000 residential and business customers in a
4,500 square mile service area.

    Headquartered in Nevada, Sierra Pacific Resources is a holding company
whose principal subsidiaries are Nevada Power Company, the electric utility
for most of southern Nevada, and Sierra Pacific Power Company, the electric
utility for most of northern Nevada and the Lake Tahoe area of California.
Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks
area of northern Nevada.  Other subsidiaries include the Tuscarora Gas
Pipeline Company, which owns 50 percent interest in an interstate natural gas
transmission partnership and several unregulated energy services companies.

    Forward-Looking Statements: This press release contains forward-looking
statements regarding the future performance of Nevada Power Company, within
the meaning of the Private Securities Litigation Reform Act of 1995.  These
statements are subject to a variety of risks and uncertainties that could
cause actual results to differ materially from current expectations.  These
risks and uncertainties include, but are not limited to, unfavorable rulings
in Nevada Power's general rate cases and deferred energy rate cases, Nevada
Power's ability to obtain any necessary local, state and federal regulatory
approvals and permits for new power plants and transmission lines and the
risks related to construction of such facilities, changes in the anticipated
costs of the projects, changes in applicable environmental laws or
regulations, Nevada Power's ability to maintain access to the capital markets
to obtain financing on favorable terms, and regulatory treatment of costs
associated with constructing and operating the projects.  Additional
cautionary statements regarding other risk factors that could have an effect
on the future performance of Nevada Power Company are contained in its Current
Report on Form 8-K dated January 10, 2006, its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2005 and its Annual Report on Form 10-K
for the year ended December 31, 2004, filed with the SEC.  Nevada Power
Company undertakes no obligation to release publicly the result of any
revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events

Link to this page: