RENO, Nev., May 7 /PRNewswire-FirstCall/ -- Sierra Pacific Resources
(NYSE: SRP), whose electric utility subsidiaries provide power to much of
Nevada and the Lake Tahoe area of California, said today that it has
approached its suppliers with a program designed to help its Nevada Power unit
meet its liquidity needs during this summer's peak power-delivery period. The
program is designed to ensure continuation of deliveries under existing power
supply contracts and to reduce near-term cash outlays for power.
Sierra Pacific Resources Chairman and Chief Executive Officer Walt Higgins
said, "This supplier payment program is an important demonstration of our
commitment to do everything possible to ensure that our customers have the
power they need without interruption. With the continued cooperation with
power suppliers, we should have adequate power and cash to meet our customers'
needs through the peak power season."
The Company began informing suppliers of specific terms of the program on
Friday, May 3. Discussions are ongoing.
"We remain convinced that continuation of deliveries under existing power
supply contracts is in the best interest of the our customers, our suppliers,
Company and the State of Nevada," he said, "and we are working to assure
uninterrupted power supply."
Mr. Higgins continued, "We are presently current with all of our vendors.
We expect to be able to meet our obligations to suppliers who work with us.
Those suppliers who choose not to work with us, however, may have to wait
longer for payment."
Nevada Power does not anticipate paying any terminating supplier's claim
until resolution of the Federal Energy Regulatory Commission Section 206
complaint proceedings and does not intend to pay any terminating supplier's
claim any sooner than it pays continuing suppliers. Claims may be subject to
the Company's pending FERC 206 proceeding challenging contract prices, as well
as to other defenses.
Termination by suppliers will not reduce the Company's potential liability
under the power contracts. As previously announced, Enron Power Marketing
Inc. terminated supply under contracts covering about 10% of purchased power
supplies for the combined utilities for the remainder of the year. Sierra
Pacific said that it expects Enron will assert claims of up to $305 million
under those contracts, which represents nearly 50% of the Company's estimated
total potential mark-to-market liability for all its power supply contracts
for this year.
Mr. Higgins stated that he was optimistic that the Company's suppliers
would continue to work with the company. "It is in their self-interest not
only because they stand to get paid sooner than if they terminate, but also
because suppliers who support us will generate goodwill within the State of
Nevada by doing their part to ensure reliability of power supply during the
peak summer months."
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 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 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, further unfavorable rulings in
pending and future rate cases, the ability of the Company to access capital
markets in light of recent ratings downgrades, whether suppliers will continue
to honor existing power and fuel supply contracts, whether long-term power
costs can be lowered through negotiation or administrative proceedings,
weather conditions during the summer of 2002 and beyond, operating hazards,
uninsured risks and changes in energy-related federal or state legislation and
regulations. Additional cautionary statements regarding other risk factors
that could have an effect on the future performance of the Company are
contained in the Company's Form 10-K filed with the SEC. The 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.
SOURCE Sierra Pacific Resources
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CONTACT:
media, Andrea Smith, +1-702-367-5683, or
investors, Rich Atkinson, +1-775-834-5640, or Barbara Doble,
+1-702-367-5647, all for Sierra Pacific Resources
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