LAS VEGAS, May 2 /PRNewswire-FirstCall/ -- Sierra Pacific Resources
(NYSE: SRP), whose electric utility subsidiaries provide power to much of
Nevada and the Lake Tahoe area of California, announced today that Enron Power
Marketing Inc. will end power deliveries to Sierra Pacific's two electric
utilities effective May 7.
Sierra Pacific said it was informed by Enron that Enron is taking the
action in line with its recently announced new business configuration that
does not include arrangements such as its existing contracts with Sierra
Pacific's utilities. Enron also indicated that it had exercised what it
believes to be its contractual right to end deliveries because of the recent
change in the credit ratings of Sierra Pacific's utilities.
"We are working to replace those supplies as needed to ensure our business
and residential customers that their electric service will be uninterrupted,"
said Sierra Pacific Resources Chairman and CEO Walt Higgins.
The Enron contracts covered approximately 10% of purchased power supplies
for the combined utilities for the remainder of the year.
Sierra Pacific's potential liability for the Enron contracts remains
unchanged. Enron has asserted a claim of approximately $305 million, but that
amount is subject to the Company's pending complaint proceeding at the Federal
Energy Regulatory Commission (FERC) challenging the contract prices and to
other defenses, which the utilities intend to pursue.
Mr. Higgins also announced that Nevada Power has approached its other
power suppliers to obtain extended payment terms that will help the Company
overcome short-term liquidity problems created when the Public Utilities
Commission of Nevada disallowed $437 million of a rate adjustment needed to
reimburse Nevada Power for costs it incurred purchasing power during last
year's energy crisis.
Sierra Pacific also has requested that the FERC appoint an administrative
law judge to preside over settlement discussions regarding its existing
power-supply contracts. Those discussions relate to the Company's pending
complaint proceedings at the FERC under Section 206 of the Federal Power Act
regarding the appropriate market-rate pricing of those supply contracts.
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.
This press release contains forward-looking statements regarding the
future performance of Sierra Pacific Resources. These statements are subject
to a variety of risks and uncertainties that could cause actual results to
differ materially from current expectations.
SOURCE Nevada Power
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CONTACT:
media, Sonya Headen, +1-702-367-5222, or
investors, Rich Atkinson, +1-775-834-5640, or Barbara Doble,
+1-702-367-5647, all for Nevada Power
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