RENO, Nev., June 11 /PRNewswire-FirstCall/ -- Sierra Pacific Resources
(NYSE: SRP) said today that a lawsuit has been filed against its two utility
subsidiaries by Enron Power Marketing Inc. over a power-supply contract that
Enron terminated earlier this year.
    "We will vigorously defend against this unwarranted action that tries to
drag down innocent companies into the Enron quagmire.  We are confident that
justice will prevail," said Walter Higgins, Chairman, President and
Chief Executive Officer of Sierra Pacific.
    Mr. Higgins added, "It is now widely believed that the energy 'crisis'
which created turmoil in Western power markets during 2000 and 2001 was in no
small part the result of questionable activities alleged to have been
perpetrated by Enron and certain others.  To let Enron profit now as a result
of those actions would be an enormous disservice to utilities and to the
rate-paying and tax-paying public who have had to bear the costs of such
activities."
    Enron's legal action, which was filed in the Bankruptcy Court for the
Southern District of New York, seeks damages measured by the difference
between the contract price for energy deliveries through the summer of 2002
and the current market price for that energy, approximately $307 million as
previously reported.
    Enron ended power deliveries on May 7 to Sierra Pacific's two utilities,
Nevada Power Company and Sierra Pacific Power Company, which provide power to
much of Nevada and the Lake Tahoe area of California.
    At the time, Sierra Pacific said it was informed by Enron that Enron was
taking the action in line with its recently announced new business
configuration that did not include arrangements such as its existing contracts
with Sierra Pacific's utilities.  Enron also indicated that it had exercised
what it believed to be its contractual right to end deliveries because of the
recent change in the credit ratings of Sierra Pacific's utilities.  These
terminations contributed to uncertainty over power supplies for Nevada for the
summer of 2002.
    The Enron contracts covered approximately 10% of purchased power supplies
for the combined utilities for the remainder of the year.  The contracts which
are the basis of Enron's lawsuit are subject to pending complaint proceedings
by Nevada Power and Sierra Pacific Power at the Federal Energy Regulatory
Commission (FERC) under Section 206 of the Federal Power Act challenging the
contract prices as well as to other defenses that the Company intends to
pursue.  Sierra Pacific and Nevada Power have asserted before FERC that the
prices in the power markets when these contracts were entered into were not
"just and reasonable" as is required by federal law.  Much recent evidence
revealed about Enron's power market activities in the western United States
during 2000-2001 has been disclosed in connection with pending proceedings at
FERC.
    In response to the utilities' request, FERC has set the matter for hearing
and has appointed an administrative law judge to preside over settlement
discussions regarding its existing power-supply contracts.
    Sierra Pacific has been involved in negotiations to replace power supply
resulting from the termination by Enron.  On Monday, the Company announced
power supply agreements with Duke Energy to fulfill consumers' electricity
needs during the peak summer period, and Duke agreed to accept a deferred
payment program for a portion of the summer costs under its existing
power-supply contracts with Nevada Power.  In addition, the Company has
approached its other continuing power suppliers to obtain extended payment
terms that will help the Company overcome short-term liquidity problems.

    About Sierra Pacific:  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.

    Safe-harbor Language:  This press release may contain 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.

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